1. Given the facts stated in the case, perform an analysis of expected future cash flows and determine the net present value of Jayco to Thor at the time of acquisition.

Detailed income statement and balance sheet for the calendar year prior to the transaction are presented in the appendix to the case. In addition to the foregoing information, Thors management expressed that their goal over the next 2-3 years was to help improve Jaycos pre-tax margins to be more in line with Thors pre-tax margin prior to the acquisition. Additional financial details for Thor, Jayco and the transaction are as follows: Thors weighted average cost of capital at the time of the transaction was approximately 8%. Income tax rate at the time of the transaction was approximately 32%.

Jayco, Corp. And Subsidiary and Affiliate Consolidated Statement of Income Year Ended December 31, 2015 2015 As Restated Net sales Cost of goods sold Gross profit $ 1,476,236,565 1,336,551,281 139,685,284 Selling General and administrative 35,864,527 33,861,160 69.725,687 69,959,597 Operating income Non-operating income (expense): Investment income Interest expense 276,926 (221,585) 55,341 70,014,938 Net income $ See notes to consolidated financial statements. Appendix: Jayco Financial Statements: Jayco, Corp. And Subsidiary and Affiliate Consolidated Balance Sheet December 31, 2015 2015 As Restated $ ASSETS Current Assets Cash Investment in trading securities Receivables Inventories Prepaid expenses Total current assets Property and Equipment, at depreciated cost Intangible Assets, net Goodwill Cash Value of Life Insurance Other Assets 31,522,009 6,861,690 88,020,406 115,426,655 2.951,018 244,781,778 53,817,010 2,201,335 852,770 5,456,586 42.055 307,151,534 $ $ 40,725,469 107,487,736 148,213,205 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Accrued liabilities Total current liabilities Long-Term Liabilities Deferred compensation Supplemental executive retirement plan obligation Total long-term liabilities Commitments and Contingencies Stockholders' Equity Common stock Retained earnings 3,469,461 7,047,240 10,516,701 4.921.461 143,500,167 148,421,628 307,151,534 $ Jayco, Corp. And Subsidiary and Affiliate Consolidated Statement of Income Year Ended December 31, 2015 2015 As Restated Net sales Cost of goods sold Gross profit $ 1,476,236,565 1,336,551,281 139,685,284 Selling General and administrative 35,864,527 33,861,160 69.725,687 69,959,597 Operating income Non-operating income (expense): Investment income Interest expense 276,926 (221,585) 55,341 70,014,938 Net income $ See notes to consolidated financial statements. Appendix: Jayco Financial Statements: Jayco, Corp. And Subsidiary and Affiliate Consolidated Balance Sheet December 31, 2015 2015 As Restated $ ASSETS Current Assets Cash Investment in trading securities Receivables Inventories Prepaid expenses Total current assets Property and Equipment, at depreciated cost Intangible Assets, net Goodwill Cash Value of Life Insurance Other Assets 31,522,009 6,861,690 88,020,406 115,426,655 2.951,018 244,781,778 53,817,010 2,201,335 852,770 5,456,586 42.055 307,151,534 $ $ 40,725,469 107,487,736 148,213,205 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Accrued liabilities Total current liabilities Long-Term Liabilities Deferred compensation Supplemental executive retirement plan obligation Total long-term liabilities Commitments and Contingencies Stockholders' Equity Common stock Retained earnings 3,469,461 7,047,240 10,516,701 4.921.461 143,500,167 148,421,628 307,151,534 $