What is the firms unlevered fcf in year 1

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You consider starting a new enterprise. This enterprise requires an initial endowment in year 0 of 500 Euro in PP&E and 400 Euro in Working Capital. Sales in the first year (year 1) are projected to be 2000 and thereafter grow at a constant rate of 10%. EBITDA is estimated to stay constantly at 20% of Sales in a given year. Corporate tax rate is 25% and Depreciation rate is 20%. Furthermore, Assume that PP&E and Working Capital generate next year's Sales. Assume that the relationship between PP&E and next year's Sales stays constant over time. Assume that the relationship between Working Capital and next year's Sales stays constant over time.

What is the firms unlevered FCF in year 1?

Apparantly the solution is 135 but i have no idea how to get to it.

Reference no: EM132413536

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