For the following problems, use Exhibit B. Exhibit B has the balance sheet and Income Statement projections for a specific company. The company is evaluating if it is worth it to have the capital investment as showed in the Capital Investment Table. The EBITDA multiplier of similar companies 14.2. The debt used has a coupon of 9.5%. The WACC is 24%.

a. What is the increase in Net Working Capital for 2022?

b. What is the increase in Net Working Capital for 2023?

c. What would be the Free Cash Flow for 2022?

d. What would be the Free Cash Flow for 2023?

e. What is the present value of the Free cash flows?

f. What is the present value of the continuation value for the firm?

g. What is the present value of the Interest Tax Shield?

h. What is the Firm Value with the expansion of the project?

\begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multicolumn{8}{|c|}{ Integrated Financial Statement Template } \\ \hline & \multicolumn{7}{|c|}{ Exhibit B: Free Cash Flow and Valuation } \\ \hline & & & 2021 & & 2022 & & 2023 \\ \hline & \multicolumn{7}{|l|}{ Income Statement } \\ \hline 1 & Sales Revenue & $ & 52,360.00 & $ & 77,513.27 & $ & 105,077.99 \\ \hline 2 & less: Cost of Goods Sold & $ & 41,364.40 & $ & 61,235.48 & $ & 83,011.61 \\ \hline 3 & EBITDA & $ & 10,995.60 & $ & 16,277.79 & $ & 22,066.38 \\ \hline 4 & less: Depreciation Expense & $ & 5,759.60 & $ & 8,526.46 & $ & 11,558.58 \\ \hline 5 & EBIT & $ & 5,236.00 & $ & 7,751.33 & $ & 10,507.80 \\ \hline 6 & less: Interest and Other Expenses & $ & 682.50 & $ & 682.50 & $ & 6,457.50 \\ \hline 7 & PRE-TAX INCOME & $ & 4,553.50 & $ & 7,068.83 & $ & 4,050.30 \\ \hline 8 & less: Income Tax & $ & 1,593.73 & $ & 2,474.09 & $ & 1,417.60 \\ \hline 9 & NET INCOME & $ & 2,959.78 & $ & 4,594.74 & $ & 2,632.69 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline & Balance Sheet & & & & & & \\ \hline 1 & ASSETS & & & & & & \\ \hline 2 & Cash and Equivalents & \$ & 8,901.20 & $ & 13,177.26 & $ & 17,863.26 \\ \hline 3 & Accounts Receivable & $ & 9,424.80 & $ & 13,952.39 & $ & 18,914.04 \\ \hline 4 & Inventory & $ & 9,948.40 & $ & 14,727.52 & $ & 19,964.82 \\ \hline 5 & CURRENT ASSETS & $ & 28,274.40 & $ & 41,857.16 & $ & 56,742.11 \\ \hline 6 & Property, Plant and Equipment & $ & 29,845.20 & $ & 44,182.56 & $ & 59,894.45 \\ \hline 7 & TOTAL ASSETS & $ & 58,119.60 & $ & 86,039.73 & $ & 116,636.56 \\ \hline 8 & LIABILITIES AND EQUITY & & & & & & \\ \hline 9 & Accounts Payable & $ & 12,042.80 & $ & 17,828.05 & $ & 24,167.94 \\ \hline 10 & CURRENT LIABILITIES & $ & 12,042.80 & $ & 17,828.05 & $ & 24,167.94 \\ \hline 11 & Long-Term Debt & $ & 6,500.00 & $ & 61,500.00 & $ & 61,500.00 \\ \hline 12 & TOTAL LIABILITIES & $ & 18,542.80 & $ & 79,328.05 & $ & 85,667.94 \\ \hline 13 & STOCKSHOLDER'S EQUITY & $ & 39,576.80 & $ & 74,134.00 & $ & 74,134.00 \\ \hline 14 & Retained Earnings & $ & - & $ & 3,675.79 & $ & 2,106.16 \\ \hline 15 & TOTAL EQUITY & $ & 39,576.80 & $ & 77,809.79 & $ & 76,240.16 \\ \hline 16 & TOTAL LIABILITIES AND EQUITY & $ & 58,119.60 & $ & 157,137.84 & $ & 161,908.09 \\ \hline \end{tabular} \begin{tabular}{|c|l|l|l|l|} \hline \multicolumn{2}{|l|}{ Net Working Capital Requirements } & & \\ \hline 2 & Current Assets & & & \\ \cline { 2 - 5 } 2 & Current Liabilities & Net Working Capital & & \\ \cline { 2 - 5 } 4 & Increase in Net Working Capital & & \\ \hline \end{tabular} \begin{tabular}{|l|l|ll|ll|ll|} \hline \multicolumn{2}{|l|}{ Capital Investment } \\ \hline 1 & Capital Investment & $ & 2,500.00 & $ & 57,500.00 & $ & 8,500.00 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Integrated Financial Statement Template } \\ \hline \multicolumn{5}{|c|}{ Exhibit B: Free Cash Flow and Valuation } \\ \hline & & 2021 & 2022 & 2023 \\ \hline & Free Cash Flow (000s) & & & \\ \hline 1 & Net Income & & & \\ \hline 2 & Plus: After-Tax Interes Expense & & & \\ \hline 3 & Unlevered Net Income & & & \\ \hline 4 & Plus: Depreciation & & & \\ \hline 5 & Less: Increases in NWC & & & \\ \hline 6 & Less: Capital Expenditures & & & \\ \hline 7 & Free Cash Flow of Firm & & & \\ \hline & Valuation of the Growth & & & \\ \hline 1 & Free Cash Flow of the Firm & & & \\ \hline 2 & PV of the Cash Flow & & & \\ \hline 3 & Continuation Value & & & \\ \hline 4 & PV of Continuation Value & & & \\ \hline 5 & net Interest Expense & & & \\ \hline 6 & Interest Tax Shield & & & \\ \hline 7 & PV Interest Tax Shield & & & \\ \hline 8 & Firm Value & & & \\ \hline \end{tabular}