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First calculate the required cash flows for your company over the next 8 years assuming sales and related items are as indicated below depending on

First calculate the required cash flows for your company over the next 8 years assuming sales and related items are as indicated below depending on your last name. Also assume that the risk-free rate is 4%, the unlevered cost of equity is 10%, and the tax rate is 40%. Then calculate the value of the firm using the Free Cash Flow to Equity method, the Free Cash Flow to the Firm method and the Residual Value method. You may assume that operating expenses are 60% of revenues and depreciation is 10% of revenues. Initial capital contributed will be 60% equity and 40% debt. You may also assume that new investment in plant and equipment in any one year is equal to depreciation for the same year, that new investment in working capital in each year is equal to 15% of the increase in sales the following year, and that new borrowing in any one year will equal 25% of the increase in sales the following year. Revenues will be $750 million in the first year, growth will be $70 million for the first 10 years, and 4% thereafter. Initial capital is $1 billion. At the end of your spreadsheet, provide an explanation and interpretation for each of the values you have found. Make sure to address whether the values are consistent with one another and if they make sense given the companys performance.image text in transcribed

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