Calculate forecasted free cash flow to the firm

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Reference no: EM131864413

The following information is given in respect of a company:

2016 Forecast 2015 Actual

Cash 10 5

Accounts receivables 30 15

Inventory 40 30

Current Assets 80 50

Gross PPE 400 300

Accumulated Depreciation -190 -140

Total Assets 290 210

Accounts Payable 20 20

Short-term debt 20 10

Current Liabilities 40 30

Long term debt 114 100

Common stock 50 50

Retained Earnings 86 30

Total liabilities and owners’ equity 290 210

Sales 400 250

Cost of goods sold 120 100

Gross Profit 180 150

SG&A 35 30

Depreciation 50 40

EBIT 195 80

Interest Expense 15 10

Pre-tax earnings 180 70

Tax (30%) 54 21

Net Income 126 49

Calculate forecasted free cash flow to the firm.

If cash flows are expected to grow at a rate of 8% from 2017 to 2030 and a rate of 3% thereafter into the foreseeable future. Compute the value of this firm if cost of capital is 12% in high growth stage and 5% in stable growth stage.

Reference no: EM131864413

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