1. Are you comfortable with Atwoods forecast in case Exhibit 3? Do you think it is feasible?

2. How could you use the past internal medicine practice transaction to estimate a credible bid price for Mary Washington Pediatrics (Multiples valuation)?

3. How could you use a DCF-based estimate for the practice value?

a. Based on case Exhibit 3, what is the free cash flow expected for each year?

As suggested in the reading: Free cash flow=Operating profit X (1- tax rate)- Change in net working capital (NWC)- Change in net equipment.

b. How would you estimate a terminal value for the practice in 2023?

4. What amount would you recommend that Atwood and Juarez submit as an opening bid on the practice? If their offer is rejected, how high should they be willing to go?

Case Attached Below:

Exhibit 1 Exhibit 3 Mary Washington Pediatrics Atwood's Financial Forecast for Mary Washington Pediatrics (financial figures in thousands of US dollars) Exhibit 1 Exhibit 3 Mary Washington Pediatrics Atwood's Financial Forecast for Mary Washington Pediatrics (financial figures in thousands of US dollars)