choose the correct answer.

Table 7.9 Spreadsheet Kappa's Net Working Capital Forecast 2021 2022 2023 2024 2025 2026 Year Working Capital ($ 000) Assets 1 Accounts Receivable 2 Raw Materials 3 Finished Goods 4 Minimum Cash Balance 5 Total Current Assets Liabilities 6 Wages Payable 7 Other Accounts Payable 8 Total Current Liabilities Net Working Capital 9 Net Working Capital (5 - 8) 10 Increase in Net Working Capital 18,493 14,525 1,973 1,534 4,192 4,967 6,164 7,262 30,822 28,288 16,970 1,775 5,838 8,485 33,067 19,689 2,039 6,815 9,845 38,388 22,709 26,059 2,329 2,646 7,911 9,138 11,355 13,030 44,304 50,872 1,294 3,360 4,654 1,433 4,099 5,532 1,695 4,953 6,648 1,941 5,938 7,879 2,211 6,900 9,110 2,570 7,878 10,448 26,168 22,756 (3,412) 26,419 3,663 30,509 4,089 35,194 4,685 40,425 5,231 Table 7.7 Spreadsheet Pro Forma Income Statement for Kappa, 2021-2026 Year 2021 2022 2023 2024 2025 2026 75,000 88,358 103,234 119,777 138,149 158,526 Income Statement ($ 000) 1 Sales 2 Cost of Goods Sold 3 Raw Materials 4 Direct Labor Costs 5 Gross Profit 6 Sales and Marketing 7 Administrative 8 EBITDA 9 Depreciation 10 EBIT 11 Interest Expense (net) 12 Pretax Income 13 Income Tax 14 Net Income (16,000) (18,665) (21,593) (24,808) (28,333) (32,193) (18,000) (21,622) (25,757) (30,471) (35,834) (41,925) 41,000 48,071 55,883 64,498 73,982 84,407 (11,250) (14,579) (18,582) (23,356) (27,630) (31,705) (13,500) (13,254) (15,485) (16,769) (17,959) (20,608) 16,250 20,238 21,816 24,373 28,393 32,094 (5,500) (5,450) (5,405) (6,865) (7,678) (7710) 10,750 14,788 16,411 17,508 20,715 24,383 (75) (6,800) (6,800) (6,800) (7,820) (8,160) 10,675 7,988 9,611 10,708 12,895 16,223 (3,736) (2,796) (3,364) (3,748) (4,513) (5,678) 6,939 5,193 6,247 6,960 8,382 10,545 Question 11 Scenario analysis. Let us assume that all input data do not change except the following inputs in red in table 7.5 (page 25): Year 2021 2022 2023 2024 2025 2026 Table 7.5. Debt and Interest Table ($ 000) 1 Outstanding Debt 2 Interest on term loan 110000 90000 10780 90000 8820 125000 8820 130000 12250 130000 12740 0.098 The new 2021 enterprise value of Kappa is CLOSEST TO: A. $216,804,196 B. $225,406,106 C. $245,579,266 D. $248,306,501 E. $249,746,346 Table 7.9 Spreadsheet Kappa's Net Working Capital Forecast 2021 2022 2023 2024 2025 2026 Year Working Capital ($ 000) Assets 1 Accounts Receivable 2 Raw Materials 3 Finished Goods 4 Minimum Cash Balance 5 Total Current Assets Liabilities 6 Wages Payable 7 Other Accounts Payable 8 Total Current Liabilities Net Working Capital 9 Net Working Capital (5 - 8) 10 Increase in Net Working Capital 18,493 14,525 1,973 1,534 4,192 4,967 6,164 7,262 30,822 28,288 16,970 1,775 5,838 8,485 33,067 19,689 2,039 6,815 9,845 38,388 22,709 26,059 2,329 2,646 7,911 9,138 11,355 13,030 44,304 50,872 1,294 3,360 4,654 1,433 4,099 5,532 1,695 4,953 6,648 1,941 5,938 7,879 2,211 6,900 9,110 2,570 7,878 10,448 26,168 22,756 (3,412) 26,419 3,663 30,509 4,089 35,194 4,685 40,425 5,231 Table 7.7 Spreadsheet Pro Forma Income Statement for Kappa, 2021-2026 Year 2021 2022 2023 2024 2025 2026 75,000 88,358 103,234 119,777 138,149 158,526 Income Statement ($ 000) 1 Sales 2 Cost of Goods Sold 3 Raw Materials 4 Direct Labor Costs 5 Gross Profit 6 Sales and Marketing 7 Administrative 8 EBITDA 9 Depreciation 10 EBIT 11 Interest Expense (net) 12 Pretax Income 13 Income Tax 14 Net Income (16,000) (18,665) (21,593) (24,808) (28,333) (32,193) (18,000) (21,622) (25,757) (30,471) (35,834) (41,925) 41,000 48,071 55,883 64,498 73,982 84,407 (11,250) (14,579) (18,582) (23,356) (27,630) (31,705) (13,500) (13,254) (15,485) (16,769) (17,959) (20,608) 16,250 20,238 21,816 24,373 28,393 32,094 (5,500) (5,450) (5,405) (6,865) (7,678) (7710) 10,750 14,788 16,411 17,508 20,715 24,383 (75) (6,800) (6,800) (6,800) (7,820) (8,160) 10,675 7,988 9,611 10,708 12,895 16,223 (3,736) (2,796) (3,364) (3,748) (4,513) (5,678) 6,939 5,193 6,247 6,960 8,382 10,545 Question 11 Scenario analysis. Let us assume that all input data do not change except the following inputs in red in table 7.5 (page 25): Year 2021 2022 2023 2024 2025 2026 Table 7.5. Debt and Interest Table ($ 000) 1 Outstanding Debt 2 Interest on term loan 110000 90000 10780 90000 8820 125000 8820 130000 12250 130000 12740 0.098 The new 2021 enterprise value of Kappa is CLOSEST TO: A. $216,804,196 B. $225,406,106 C. $245,579,266 D. $248,306,501 E. $249,746,346