(ALL WORK MOST BE DONE IN EXCEL)(SHOW YOUR WORK)

You have taken a job with BlueComm, a telecommunications company, as a financial analyst in their corporate finance department. As your first assignment, your boss has asked you to complete a free cash flow and corporate valuation of BlueComm. You have been provided with the following projected financial statements for BlueComm for the fiscal years ending July 31 ($ in 000s):

Projected Earnings
	2021	2022	2023
Sales	$825.0	$885.6	$938.6
Less: Operating Costs	(632.5)	(695.8)	(737.5)
Operating Income (EBIT)	192.5	189.8	201.1
Less: Interest Expense	(36.2)	(39.8)	(41.1)
Earnings before taxes (EBT)	156.3	150.0	160.0
Depreciation included in operating costs	60.0	65.0	69.0
Current Assets	323.0	354.0	375.0
Current Liabilities	196.0	215.0	228.0
Capital Expenditures	120.0	90.0	65.0

In addition, your boss provided you with the following assumptions ($ in 000s):

• BlueComms tax rate is 39%
• BlueComms 2020 Net Working Capital was $105.0
• BlueComm expects its 2023 free cash flow to grow at 3.5 percent in perpetuity; and
• BlueComms WACC is 12.0 percent;

Based upon the above information:

a) Prepare a Free Cash Flow for each projected year (2021 thru 2023)

b) Calculate the business value of the company