=1/Boomwichers NV, a Dutch company financed by shareholders’ equity only, decides, during the course of year n, to finance an investment project worth €200m using shareholders’

equity (50%) and debt (50%). The loan it takes out (€100m) will be paid off in full in n+5, and the company will pay 5% interest per year over the period. At the end of the period, you are asked to complete the following simplified table (no further investments are to be made):

Period n n+1 n+2 n+3 n+4 n+5 Operating inflows Operating outflows 165 165 200 175 240 180 280 185 320 180 360 190 Operating cash flows Investments −200 Free cash flows Flows . . .

. . . to creditors

. . . to shareholders What do you conclude from the above?