An analyst has used the percent of sales method to forecast the items in the table below for 2020-2022 for New Energy, Inc., which is financed with common equity only. The beta for the companys stock is 1.2, and the companys tax rate is 38%. Assume a risk-free rate of 4% and an equity market risk premium of 5%. Estimates for New Energy, Inc.

Amounts in $ Millions

2019 Actual 2020 Forecast 2021 Forecast 2022 Forecast

Operating Income (EBIT) 2,410 2,555 2,790 2,958

Net Plant and Equipment 8,326 8,826 9,355 9,916

Operating Current Assets 5,551 5,884 6,237 6,611

Operating Current liabilities 1,680 1,781 1,887 2,001

1(b) What is the net operating profit after taxes (NOPAT) for 2020?

1(c)What is the net operating working capital (NOWC), and total net operating capital (TNOC) for each of the years 2019 and 2020?

1(d) What is the free cash flow for 2020? 1(e) Using your forecast of free cash flow for 2020, and assuming you have also forecast that the free cash flow for 2021 is $954 million, and the sum of the free cash flow and terminal (horizon) value for 2022 is $18,571 million, draw the time line for expected cash flows available for investors in 2020, 2021 and 2022, and estimate New Energy, Inc.s value of operations based on the forecasts