Case 48 is an exercise in valuing a potential acquisition target using discounted cash flow approach in their analysis.

What stand-alone cash flows (base-case cash flows) do you forecast? Show in Excel spreadsheet with correct cell formula.

EXHIBIT 14Sun Microsystems Historical and Projected Income Statement (in millions of U.S. dollars) Fiscal Year-End June 30 2014E 2011E 13,047 5,464 2013E 2009E 11,449 4,731 2010E 12,665 4,980 2012E 13,526 5,791 13,880 13,885 14,243 Net Revenue Cost of Sales 13,873 ?608 7,425 671 8 7,685 7,583 7,735 7,889 8,075 6,168 6,455 3,955 Gross Margin Selling, General, & Administrative 3,851 3,461 Research & Development Impairment of Goodwill Other Operating Expense 398 6,967 (2,236) 474 29.3% 1,788 15.6% 5,121 5,249 5.372 5,956 6,083 4,839 Total Operating Expense Operating Income Depreciation & Amortization 747 472 456 30.0% 1,566 12.0% 500 470 30.0% 476 30.0% 30.0% 1,666 12.0% 30.0% 34.4% 1,611 11.6% as % of Prior Year PP&E 29.5% 1,709 12.0% Net PP&E 11 .6% 12.0% 12.0% as % of Sales Data Sources: Company filings and case writer estimates