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Gross Margin 40% Fixed Costs $2,000 Revenue Growth Rate for Years 1 to 5 10% FCF Steady Growth 3% Discount Rate 12% Year 1 Revenue
Gross Margin 40%
Fixed Costs $2,000
Revenue Growth Rate for Years 1 to 5 10%
FCF Steady Growth 3%
Discount Rate 12%
Year 1 Revenue $5,000
Tax Rate 35%
Terminal Year 5
Please answer the following questions
- What percentage the terminal value contributes to the total enterprise value?
- How sensitive is your valuation to inputs?
Use the attached excel template.
Enterprise Valuation & Terminal Value Given Gross Margin $ Fixed Costs Revenue Growth Rate for Years 1 - 5 FCF Steady Growth Discount Rate $ Year 1 Revenue Tax Rate Terminal Year 40% 2,000 10% 3% 12% 5,000 35% 5 1 Revenues Gross profits Fixed Costs Net Operating Income Taxes Free Cash Flow NPV for Years 1-5 Cash Flows Terminal Value (as of Year 5) PV of Terminal Value Enterprise Value PV of Terminal Value / Enterprise Value 2 3 4 Solution Legend Value given in problem Formula/Calculation/Analysis required Crystal Ball Input Crystal Ball Output 5Step by Step Solution
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