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%

Goal 5- Discuss three ways in which your financing modeling assumptions may be incorrect and state the associated impact on the ATCFs, NPV and IRR. Your discussion should be around 250 words in lenght. Proof read before submitting