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How do I figure or calculate the capital spending in the table? $40 Million debt; 3.5 Million Shares Outstanding WACC=8%;TC=21% Sales today: $30 Million; EBIT
How do I figure or calculate the capital spending in the table?
\$40 Million debt; 3.5 Million Shares Outstanding WACC=8%;TC=21% Sales today: $30 Million; EBIT of $10 million; growth of 15% for 4 years &2% thereafter. \begin{tabular}{lrrrrr} & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 \\ \hline EBIT & $10.00 & $11.50 & $13.23 & $15.21 & $17.49 \\ Depreciation & 1.50 & 1.73 & 1.98 & 2.28 & 2.62 \\ Taxes* & 2.10 & 2.42 & 2.78 & 3.19 & 3.67 \\ Change in NWC & .80 & .92 & 1.06 & 1.22 & 1.40 \\ Capital spending & 2.40 & 2.76 & 3.17 & 3.65 & 4.20 \\ \cline { 2 - 6 } CFA CF & $6.20 & $7.13 & $8.20 & $9.43 & $10.84 \\ \hline \end{tabular} \$40 Million debt; 3.5 Million Shares Outstanding WACC=8%;TC=21% Sales today: $30 Million; EBIT of $10 million; growth of 15% for 4 years &2% thereafter. \begin{tabular}{lrrrrr} & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 \\ \hline EBIT & $10.00 & $11.50 & $13.23 & $15.21 & $17.49 \\ Depreciation & 1.50 & 1.73 & 1.98 & 2.28 & 2.62 \\ Taxes* & 2.10 & 2.42 & 2.78 & 3.19 & 3.67 \\ Change in NWC & .80 & .92 & 1.06 & 1.22 & 1.40 \\ Capital spending & 2.40 & 2.76 & 3.17 & 3.65 & 4.20 \\ \cline { 2 - 6 } CFA CF & $6.20 & $7.13 & $8.20 & $9.43 & $10.84 \\ \hline \end{tabular}Step by Step Solution
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