1. The Blue Rend Inc. produces air-condition materials in Italy. With $1,500,000 of Net Sales in 2020 the Blue-Rend has become the second largest producer for the cooling items in the market. As of today (31.12.2020), shares outstanding of the firm is 128,000. Net Sales of the company is expected to increase by 5% in following 3 years (2021, 2022 and 2023). Beside this, financial analyst of the firm estimates the following ratios: a) Current EBIT margin of the firm is 60% and it will be constant for future. b) Current NWC turnover is 5 and it will be constant for each year c) Current Fixed Asset turnover 6 and it will be constant for each year According to the report of finance department total market value of company's long term and short-term debts is $2,045,000. The firm expects 2% increase in its free cash flows after 2023. Weighted average cost of capital of the firm is 12% and expected to be constant for the following 3 years. Tax rate of the firm is 40%. Calculate the intrinsic stock value of the firm using the Table below. Show all of your calculations for the last column (year 2023) and NPV of free cash flows, (75 MARKS) 2020 2021 2022 2023 Net Sales EBIT Panel A assumptions NWC Fixed Assets NOPAT ANWC AFA FCF HV Panel B Panel B NPV of FCF Debt Value Equity Value Shares Outstanding Intrinsic stock value EBIT Margin EBIT Net Sales Net Sales NWC turnover = NWC Fixed Asset turnover = Net Sales FA HV = FCF.(1 + g) WACC - 9 FCF = EBIT - Tax + Depreciation - (ANWC + AFA)