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b. Calculate free cash flow for each projected year. Also calculate the growth rates of free cash flow each year to ensure that there is
b. Calculate free cash flow for each projected year. Also calculate the growth rates of free cash flow each year to ensure that there is constant growth (i.e., the same as the constant growth rate in sales) by the end of the forecast period. | |||||
Actual | Projected | Projected | Projected | Projected | |
Calculation of FCF | 12/31/16 | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 |
Operating current assets | $248.0 | $285.2 | $313.7 | $332.5 | $352.5 |
Operating current liabilities | $56.0 | $64.4 | $70.8 | $75.1 | $79.6 |
Net operating working capital | $192.0 | $220.8 | $242.9 | $257.5 | $272.9 |
Net PPE | $600.0 | $690.0 | $759.0 | $804.5 | $852.8 |
Total net operating capital | $792.0 | $910.8 | $1,001.9 | $1,062.0 | $1,125.7 |
NOPAT | |||||
Investment in total net operating capital | na | ||||
Free cash flow | na | ||||
Growth in FCF | na | na | |||
Growth in sales | 15.0% | 10.0% | 6.0% | 6.0% |
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