For the next six $(6)$ questions, you will need the supplemental Excel file found HERE.

You are an Associate at SER Management, a middle$-$market private equity firm focused on the financial services space. You are tasked with building an LBO model to assess the return profile of an investment in Project Final Exam. The initial steps in this process involve building out the leverage assumptions and sources and uses of funds for the transaction, and then projecting the key items that impact cash flow before constructing the debt and interest rate schedules, exit returns and sensitivities$.$ During these initial steps, you typically put a placeholder in the interest expense line because it will be linked to the debt and interest schedules once they$$re built.

The Excel file contains a free cash flow projection model for Project Final Exam. The following sections need to be completed: Leverage Assumptions, Sources & Uses of Funds, the Income Statement projection, Net Working Capital and Capital Expenditures projections, and the Free Cash Flow projection.

NOTE: You are working only in the yellow shaded cells. The Excel file is already formatted for you. To avoid calculation errors, do not change the formatting in the file.

Step $1$: Complete the Leverage Assumptions section by calculating the leverage multiples for each tranche of debt based on LTM EBITDA as of $12/31/2023.$

Step $2$: Complete the Sources & Uses of Funds section based on the transaction assumptions provided.

Step $3$: Complete the Income Statement projection based on the drivers and assumptions provided.

Step $4$: Complete the Net Working Capital and Capital Expenditures projections based on the drivers and assumptions provided.

Step $5$: Complete the Free Cash Flow projection.

Step $6$: Answer the following questions.

Question $1$ of $6$: How many turns of Term Loan A debt is the private equity firm using to finance this transaction?

A$)1\mathrm{.}9$x

B$)2\mathrm{.}7$x

C$)3\mathrm{.}2$x

D$)4\mathrm{.}0$x

Question $2$ of $6$: What is the total leverage multiple being modeled for this transaction?

A$)5\mathrm{.}2$x

B$)5\mathrm{.}9$x

C$)6\mathrm{.}3$x

D$)7\mathrm{.}0$x

Question $3$ of $6$: How much new equity is the private equity firm investing into this deal?

A$)$$$2,047$

B$)$$$2,100$

C$)$$$3,298$

D$)$$$5,145$

Question $4$ of $6$: How much is the target company projected to generate in EBITDA for the period $2027$P$?$

A$)$ $$514$

B$)$$$578$

C$)$$$499$

D$)$ $$545$

Question $5$ of $6$: How much is the target company projected to generate in Net Income for the period $2028$P$?$

A$)$$$276$

B$)$$$285$

C$)$$$301$

D$)$$$310$

Question $6$ of $6$: How much is the target company projected to generate in free cash flow for the period $2029$P after these initial modeling steps?

A$)$$$295$

B$)$$$304$

C$)$$$316$

D$)$$$329$