1. Given the following data what is the free cash flow?¹

2. If you assume 6% growth for three years, 3% growth after that, and a required rate of return of 5% what's the NPV of the cash flow going forward? ²

3. And at what price would you feel it's a strong buy and what price would be a strong sell? ³

NDNU CORPORATION Common stock (1 million shares)

INCOME STATEMENTS FOR YEAR ENDING SEPTMEBER (THOUSANDS OF DOLLARS)

	2013	2012
Sales	126,508	98,249
Operating costs excluding depreciation	47,846	34,431
Earnings before interest and taxes	78,662	63,818
Less interest	0	0
Earnings before taxes	78,662	63,818
Taxes (25%)	19,665	15,954
Net income available to common stockholders	58,996	47,863
Common dividends	0	0

BALANCE SHEETS FOR YEAR ENDING SEPTEMBER (THOUSANDS OF DOLLARS)

	2013	2012
Assets
Cash and marketable securities	59,129	35,982
Accounts receivable	41,275	13,731
Inventories	7,249	5,305
Total current assets	107,673	55,018
Net plant and equipment and other assets	98,621	84,782
Total assets	206,294	139,800
Liabilities and equity
Accounts payable	42,589	33,879
Notes payable	0	0
Accruals	0	0
Total current liabilities	42,589	33,879
Long-term bonds	0	0
Total debt	42,589	33,879
Retained earnings	137,474	82,477
Common stock	26,121	23,444
Common Equity	163,595	101,922
Total liabilities and equity	206,294	139,800