ABC Corp. plans to go into business on $1/1/2022.$ It will start its business with a fixed asset that will cost $$700.$ MKM will acquire another fixed asset on $1/1/23.$ The cost of that asset will be $$690.$ Its expected salvage value and useful life will be $$10$ and $4$ years. Depreciations are $$120$ in $2022$ and $$200$ in $2023.$ MKM expects to generate revenues of $$1,000$ and $$1,200$ in $2022$ and $2023$ respectively. Operating expenses $($cash operating costs$)$ excluding depreciation are expected to be $40\%$ of revenues in each of $2022$ and $2023.$ Interest expenses in $2022$ and $2023$ are expected to be $$20$ and $$30$ respectively. MKM$$s tax rate is expected to be $30\%.$ You have the following additional information:

$1/1/20221/1/20231/1/2024$

Current Assets $ $110$ $ $100$ $ $150$

A$/$P $+$ Accruals $103050$

gross fixed assets $7001,6001,600$

$20222023$

Stock Price $ $10$ $$8$

Number of Shares $20,00030,000$

EPS $$0\mathrm{.}30-$$$0\mathrm{.}60$

DPS $$0\mathrm{.}15$ $$0\mathrm{.}10$

Compute the following for $2022$ and $2023$:

$1.$ EBIT $=$ revenue $-$ cash operating costs $-$ depreciation

$2022$

$2023$

$2.$ net income $=($EBIT $$ interest$)(1-$taxrate$)$

$2022$

$2023$

$3.$ net operating profit after tax $($NOPAT$)=$ EBIT $(1-$taxrate$)$

$2022$

$2023$

$4.$ net cash flow $=$ net income $+$ depreciation

$2022$

$2023$

$5.$ net operating cash flow $=$ EBIT $(1-$taxrate$)+$Depreciation $=$ NOPAT $+$ Depreciation

$2022$

$2023$

$6.$ net operating working capital $=$ all current assets excluding short$-$term investments

$$ all current liabilities that do not charge interest

$2022$

$2023$

$2024$

$7.$ net operating capital $=$ net operating working capital $+$ net fixed assets

$2022$

$2023$

$2024$

$8.$ gross investment in operating capital $=$net operating capital in year $($t$+1)$ net operating capital in year $($t$)$

$2022$

$2023$

$9.$ net investment in operating capital $=$ gross investment $$ depreciation

$2022$

$2023$

$10.$ free cash flow $=$ operating cash flow $$ gross investment in operating capital

$=$ NOPAT $-$ net investment in operating capital

$2022$

$2023$

$11.$ What is the value of this firm on $1/1/2022,$ if WACC is $10\%.$