3. Using the cash 8 mkt. securities as the Plug ( Cash \& Mkt Securities = Total Liabilities and Equity - Current Assets - Net Fised Assets) predict the financial statements for the nent 5 years (year 2018 through 2022). If the firm does not have enough internally generated funds, then only in that situation, it can borrrov money. Given a WACC of 10\% and a Long Term grovth rate in FCFs of 5%, determine the enterprise value and equity (3 points) Show the formulas the section in orange referencing the cells on column G(G26 through G70) and column B(B71 through B75) Make the calculations in the turquoise cells. Build a chart of the Equity value as a function of the SG\&A. \begin{tabular}{|l|r|} \hline Sales growth & 15% \\ \hline Current assets/Sales & 15% \\ \hline Current liabilities/Sales & 8% \\ \hline Net fiked assets'Sales & 70% \\ \hline Costs of goods soldi Sales & 65% \\ \hline Sales, general and administrative expenses & 100 \\ \hline Depreciation rate & 10% \\ \hline Interest rate on debt & 5.00% \\ \hline Interest paid on cash \& marketable securities & 3.00% \\ \hline Tax rate & 38% \\ \hline \end{tabular} The firm neither repays any existing debt nor borrows any more money over the 5 yr horizon of the pro formas Debt is assumed unchanged. Stock does not change either ( no new stock issuances and no stock repurchases). However, if the firm does not have enough cash it can increase its debt Cash and Mkt Securities is the PLUG. The average balances of cash and marketable securities are assumed to earn 3% interest Depreciation = Depreciation rate "Average fised assets at cost over the year Interest gain on cash 8 equivalents = Interest rate on cash 8 equivalents" Average amount over the year Interest payments on debt = Interest rate on debt " Average debt over the year tis ingurtant to wa the appropriate the formulas. \begin{tabular}{|l|l|l|l|l|l|l|} \hline Year & 2017 & 2018 & 2019 & 2020 & 2021 & 2022 \\ \hline Free cash flow calculation & & & & & & \\ \hline & & & & & & \\ \hline Profit after tan & & & & & & \\ \hline Addback depreciation & & & & & & \\ \hline Subtract increase in current assets & & & & & & \\ \hline Addback increase in current liabilities & & & & & & \\ \hline Subtract increase in fixed assets at cost & & & & & & \\ \hline Addback after-tan interest on debt & & & & & & \\ \hline Subtract after-tan interest on cash 8mkt securities & & & & & \\ \hline Free cash flow & & 0 & 0 & 0 & 0 & 0 \\ \hline \end{tabular} Valuing the firm \begin{tabular}{|l|c|c|c|c|c|c|} \hline Weighted average cost of capital & 10% & \multicolumn{1}{|l|}{} \\ \cline { 1 - 8 } Long term FCF Growth Rate & 5% & & & \\ \hline Year & 2017 & 2018 & 2019 & 2020 & 2021 & 2022 \\ \hline FCF & & & & & & \\ \hline Terminalvalue & & & & & & \\ \hline Total & & & & & & \\ \hline \end{tabular} \begin{tabular}{|r|r|l|} \hline Data table: Value as function & & \\ \cline { 2 - 3 } of SG\&A & 0 & \\ \cline { 2 - 3 } & 50 & \\ \hline 100 & \\ \hline 150 & \\ \hline 200 & \\ \hline 250 & \\ \hline 300 & \\ \hline 350 & \\ \hline 400 & \\ \hline 450 & \\ \hline 500 & \\ \hline 550 & \\ \hline 600 & \\ \hline \end{tabular} Sales Grovth Rate 3. Using the cash 8 mkt. securities as the Plug ( Cash \& Mkt Securities = Total Liabilities and Equity - Current Assets - Net Fised Assets) predict the financial statements for the nent 5 years (year 2018 through 2022). If the firm does not have enough internally generated funds, then only in that situation, it can borrrov money. Given a WACC of 10\% and a Long Term grovth rate in FCFs of 5%, determine the enterprise value and equity (3 points) Show the formulas the section in orange referencing the cells on column G(G26 through G70) and column B(B71 through B75) Make the calculations in the turquoise cells. Build a chart of the Equity value as a function of the SG\&A. \begin{tabular}{|l|r|} \hline Sales growth & 15% \\ \hline Current assets/Sales & 15% \\ \hline Current liabilities/Sales & 8% \\ \hline Net fiked assets'Sales & 70% \\ \hline Costs of goods soldi Sales & 65% \\ \hline Sales, general and administrative expenses & 100 \\ \hline Depreciation rate & 10% \\ \hline Interest rate on debt & 5.00% \\ \hline Interest paid on cash \& marketable securities & 3.00% \\ \hline Tax rate & 38% \\ \hline \end{tabular} The firm neither repays any existing debt nor borrows any more money over the 5 yr horizon of the pro formas Debt is assumed unchanged. Stock does not change either ( no new stock issuances and no stock repurchases). However, if the firm does not have enough cash it can increase its debt Cash and Mkt Securities is the PLUG. The average balances of cash and marketable securities are assumed to earn 3% interest Depreciation = Depreciation rate "Average fised assets at cost over the year Interest gain on cash 8 equivalents = Interest rate on cash 8 equivalents" Average amount over the year Interest payments on debt = Interest rate on debt " Average debt over the year tis ingurtant to wa the appropriate the formulas. \begin{tabular}{|l|l|l|l|l|l|l|} \hline Year & 2017 & 2018 & 2019 & 2020 & 2021 & 2022 \\ \hline Free cash flow calculation & & & & & & \\ \hline & & & & & & \\ \hline Profit after tan & & & & & & \\ \hline Addback depreciation & & & & & & \\ \hline Subtract increase in current assets & & & & & & \\ \hline Addback increase in current liabilities & & & & & & \\ \hline Subtract increase in fixed assets at cost & & & & & & \\ \hline Addback after-tan interest on debt & & & & & & \\ \hline Subtract after-tan interest on cash 8mkt securities & & & & & \\ \hline Free cash flow & & 0 & 0 & 0 & 0 & 0 \\ \hline \end{tabular} Valuing the firm \begin{tabular}{|l|c|c|c|c|c|c|} \hline Weighted average cost of capital & 10% & \multicolumn{1}{|l|}{} \\ \cline { 1 - 8 } Long term FCF Growth Rate & 5% & & & \\ \hline Year & 2017 & 2018 & 2019 & 2020 & 2021 & 2022 \\ \hline FCF & & & & & & \\ \hline Terminalvalue & & & & & & \\ \hline Total & & & & & & \\ \hline \end{tabular} \begin{tabular}{|r|r|l|} \hline Data table: Value as function & & \\ \cline { 2 - 3 } of SG\&A & 0 & \\ \cline { 2 - 3 } & 50 & \\ \hline 100 & \\ \hline 150 & \\ \hline 200 & \\ \hline 250 & \\ \hline 300 & \\ \hline 350 & \\ \hline 400 & \\ \hline 450 & \\ \hline 500 & \\ \hline 550 & \\ \hline 600 & \\ \hline \end{tabular} Sales Grovth Rate