20 +19 Forecasts for years 1 to 8 as follows (USD millions): Y Year EBIT Depreciation and Amortization 15 Capital Expenditures 300 Increase in Working Capital 10 Taxes 4 1 20 50 15 0 0 10 2 15 0 0 18 3 90 220 15 150 44 4 30 0 240 25 0 5 48 60 300 25 0 6 7 -20 -20 65 25 0 325 350 0 0 70 8 25 Assume a discount rate of 16% and a 12x EBITDA multiple for exit at the end of the 8th year. Questions: a) Calculate the PV of FCFs; b) How much should the PE fund offer if it wants to achieve 25% IRR