Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

FCF Projections Ogier Incorporated currently has $760 million in sales, which are projected to grow by 12% in Year 1 and by 7% in Year

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

FCF Projections Ogier Incorporated currently has $760 million in sales, which are projected to grow by 12% in Year 1 and by 7% in Year 2. Its operating profitability (OP) is 6%, and its capital requirement (CR) is 75%. Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places. a. What are the projected sales in Years 1 and 2? Sales in Year 1: $ million million Sales in Year 2: $ b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? NOPAT Year 1: $ NOPAT for Year 2: $ c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? OpCap for Year 1: $ OpCap for Year 2: $ d. What is the projected FCF for Year 2? $ million million million million million Value of Operations: Constant FCF Growth EMC Corporation's current free cash flow of $520,000 and is expected to grow at a constant rate of 4.5%. The weighted average cost of capital is WACC = 10%. Calculate EMC's estimated value of operations. Do not round intermediate calculations. Round your answer to the nearest dollar. $ Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations are shown below. Projected 2021 2022 2020 $678.960 $719.007 $768.100 Free cash flow (millions of dollars) Growth is expected to be constant after 2021, and the weighted average cost of capital is 10.95%. What is the horizon (continuing) value at 2022 if growth from 2021 remains constant? Do not round intermediate calculations. Do not round the growth rate. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number. LA Actual 2019 $618.280 million Horizon Value of Free Cash Flows JenBritt Incorporated had a free cash flow (FCF) of $70 million in 2019. The firm projects FCF of $220 million in 2020 and $450 million in 2021. FCF is expected to grow at a constant rate of 6% in 2022 and thereafter. The weighted average cost of capital is 10%. What is the current (i.e., beginning of 2020) value of operations? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to two decimal places. LA million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Get Rich With Dividends

Authors: Marc Lichtenfeld

3rd Edition

1119985552, 978-1119985556

More Books

Students also viewed these Finance questions