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Can you assist me with my homework? I wanted to know if my calculations are right. Using the following set of parameters: Gross Margin 40%

Can you assist me with my homework? I wanted to know if my calculations are right.

Using the following set of parameters:

Gross Margin 40%

Fixed Costs $2,000

Revenue Growth Rate for Years 1 to 5 10%

FCF Steady Growth 3%

Discount Rate 12%

Year 1 Revenue $5,000

Tax Rate 35%

Terminal Year 5

please answer the following questions

  1. what percentage the terminal value contributes to the total enterprise value?
  2. How sensitive is your valuation to inputs?
image text in transcribed Enterprise Valuation & Terminal Value Given Gross Margin $ Fixed Costs Revenue Growth Rate for Years 1 - 5 FCF Steady Growth Discount Rate $ Year 1 Revenue Tax Rate Terminal Year 40% 2,000 10% 3% 12% 5,000 35% 5 1 Revenues Gross profits Fixed Costs Net Operating Income Taxes Free Cash Flow NPV for Years 1-5 Cash Flows Terminal Value (as of Year 5) PV of Terminal Value Enterprise Value PV of Terminal Value / Enterprise Value 2 3 4 Solution Legend Value given in problem Formula/Calculation/Analysis required Crystal Ball Input Crystal Ball Output 5

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