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hi, please help me solving this problem, thank you! Consider the table given below to answer the following question. Year Asset value Earnings Net investment
hi, please help me solving this problem, thank you!
Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCF) Return on equity (ROE) Asset growth rate Earnings growth rate 1 10.00 1.20 1.20 0.00 0.12 0.12 2 11.20 1.34 1.34 0.00 0.12 0.12 0.12 3 12.54 1.51 1.51 0.00 0.12 0.12 0.12 4 14.05 1.69 1.26 0.42 0.12 0.09 0.12 5 15.31 1.84 1.38 0.46 0.12 0.09 0.09 6 16.69 1.92 1.50 0.42 0.115 0.09 0.04 7 18.19 2.00 1.09 0.91 0.11 0.06 0.04 8 19.29 2.03 1.16 0.87 0.105 0.06 0.01 9 20.44 1.64 1.23 0.41 0.08 0.06 -0.19 10 21.67 1.73 1.30 0.43 0.08 0.06 0.06 Assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6,11% in year 7. 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCF) Return on equity (ROE) Asset growth rate Earnings growth rate 1 10.00 1.20 1.20 0.00 0.12 0.12 2 11.20 1.34 1.34 0.00 0.12 0.12 0.12 3 12.54 1.51 1.51 0.00 0.12 0.12 0.12 4 14.05 1.69 1.26 0.42 0.12 0.09 0.12 5 15.31 1.84 1.38 0.46 0.12 0.09 0.09 6 16.69 1.92 1.50 0.42 0.115 0.09 0.04 7 18.19 2.00 1.09 0.91 0.11 0.06 0.04 8 19.29 2.03 1.16 0.87 0.105 0.06 0.01 9 20.44 1.64 1.23 0.41 0.08 0.06 -0.19 10 21.67 1.73 1.30 0.43 0.08 0.06 0.06 Assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6,11% in year 7. 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value millionStep by Step Solution
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