Question
Basic synopsis: Your firm may purchase certain assets from a struggling competitor. The competitor is asking $50,000,000 for the assets. Last year, the assets produced
Basic synopsis:
Your firm may purchase certain assets from a struggling competitor. The competitor is asking $50,000,000 for the assets. Last year, the assets produced revenues of $15,000,000. Revenues earned in the next year (i.e., year 1) and in future years are estimated using the information in the table below.
Your staff expects that the following assumptions will hold over the operating period:
- The assets will be viable for another 10 years but will be worthless at the end of the 10 year period
- The assets are qualified by the IRS for depreciation using the straight-line method
- The firm will have a tax rate of 20%
Your staff has also identified three key areas of uncertainty, which include
| Worst-Case | Base-Case | Best-Case |
Cash Expenses as a % of Revenues | 60% | 55% | 45% |
WACC | 20% | 15% | 8% |
Revenue Growth Rate | -10% | 0% | 7% |
Probability | 10% | 80% | 10% |
For this case, address the following goals (each goal should be shown in a separate worksheet in an Excel workbook; provide labels on each worksheet):
Goal 1- Develop the annual pro forma after-tax cash flow statement for each scenario
Please help me with excel formulas
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