BMBA $9460$ group is carrying out a set of analysis to decide whether to start a new company called MBA Starters Inc $($MS$).$ If we start MS in $2024,$ MS will have no sales in $2024.$ MS is expected to have sales of $$200$ million in $2025$ and the sales will grow at the rate of $20\%$ in $2026$; $30\%$ in $2027$; $10\%$ in $2028$; and $2\%$ from $2029$ on forever. We expect that net income will be $48\%$ of sales $($based on the estimation that EBIT to be $60\%$ of sales and we have to pay a corporate tax rate of $20\%).$ We expect that increases in net working capital requirements to be $9\%$ of any increase in sales, capital expenditures to be $7\%$ of sales, and depreciation expenses to be $6\%$ of sales. The weighted average cost of capital is estimated to be $15\%.$ To start the company, we need to invest $$500$ million at the end of $2024.$ As a potential CEO, would you recommend us to start the new company based on the NPV$?$ What$$s the potential value of this decision? $($hint: The potential value can be measured using the NPV of the project.$)$ If we are planning for an IPO at the beginning of $2025$ to sell all the equity for $10$ million shares, what is the fair price for each share of our company stock? What$$s the internal rate of return $($IRR$)$ of the project assuming that we invest and sell the firm at the beginning of $2030?$ Would you recommend us to start the new company based on the IRR?

You can use the given Excel template or type your answers here, but not both. If you haven't used the Excel file, you can also type your answer for this question in the following text field. $3$ points$)$ the terminal firm value at the beginning of $2030$ is calculated as

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_=\_\_\_\_\_\_\_\_\_\_$;

$(3$ points$)$ the total firm value at the beginning of $2025$ is calculated as

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_=\_\_\_\_\_\_\_\_\_\_$;

$(2$ points$)$ the fair stock price at the IPO is calculated as

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_=\_\_\_\_\_\_\_\_\_\_$per share;

$(3$ points$)$ the NPV of this project before we make any investment is calculated as $($You can either write the formula for the NPV calculation or the financial keys that you use to calculate the NPV here.$)$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_=\_\_\_\_\_\_\_\_\_\_$;

$(1$ point$)$ based on this NPV$,$ we $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_($should or shouldn$$t$)$ start the new company.

$(3$ points$)$ The internal rate of return $($IRR$)$ of the project assuming that we invest and sell the firm at the beginning of $2030$ is $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\%.$

$(1$ point$)$ based on this IRR, we $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_($should or shouldn$$t$)$ start the new company.

If you have used the Excel Template file, please upload your finished Excel file