7. (15 pts) Following are income statements and balance sheets for the Munich Exports Corporation Balance Sheets 2016 Forecast 2017 Cash S 50.000 $ 150,000 Accounts receivable 200,000 250,000 Inventories 450.000 500.000 Total current assets 700,000 900.000 Fixed assets, net 300,000 400,000 Total assets $1.000.000 S1.300.000 Account payable 140,000 180,000 Accruals 50,000 70,000 Bank loan 80.000 90.000 Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock 250,000 250,000 Retained earnings 80.000 160,000 Total liabilities and equity S1.000.000 $1.300.000 Income statements 2016 Forecast 2017 Net Sales $1,300.000 $1,600,000 Cost of goods sold 780,000 960.000 Gross profit 520,000 640,000 SG&A expenses 300.000 300,000 Depreciation 40.000 55.000 EBIT 180,000 285,000 Interest 45.000 55.000 EBT 135,000 230.000 Income taxes (40% rate) 54.000 88,000 Net income $ 81,000 $ 142,000 Assume that Munich Export's required cash is set at 2 percent of sales. Any additional cash would be surplus cash. A. Estimate the dollar amount of equity valuation cash flow for 2017. (6 points) B. Estimate the dollar amount of enterprise valuation cash flow for 2017. (2 points) c. Let's assume that investors want to estimate the venture's present value at the end of 2016. Following Part A, assume that equity valuation cash flow for 2018 grows by 10%. Starting from 2018, the venture is entering its maturate stage. Cash flows are expected to grow at a perpetual 8 percent annual rate after 2018 What is the Munich Export's present value if investors want an annual rate of retum of 20 percent using equity valuation method (assuming that a single discount rate is appropriate for discounting all cash flows)? (7 points)