Use the following information to develop a spreadsheet model that will calculate the free cash flows and the value of the equity for the company.

Cost of capital 12%

Most recent year’s sales $1000 Nonoperating assets $100 LO6 Interest-bearing debt $250 Operating profit margin 12%

Working capital/sales 35%

Fixed assets/sales 20%

Noninterest-bearing Current liabilities/sales 10%

Tax rate 40%

Forecasted sales growth Years 1
2 12%

Years 3
5 8%

6
N 4%

Calculate the value of the firm and the value of the equity in the firm using DCF analysis.