Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need assistance with calculating NOPAT and the amounts for the DFC Model Following are the income statement and balance sheet for Intel Corporation. begin{tabular}{|c|c|c|c|}
I need assistance with calculating NOPAT and the amounts for the DFC Model
Following are the income statement and balance sheet for Intel Corporation. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} INTEL CORPORATION \\ Consolidated Statements of Income \end{tabular}} \\ \hline Year Ended (In millions) & Dec. 25,2010 & Dec. 26, 2009 & Dec. 27,2008 \\ \hline Net revenue & $44,123 & $35,127 & $37,586 \\ \hline Cost of sales & 15,132 & 15,566 & 16,742 \\ \hline Gross margin & 28,991 & 19,561 & 20,844 \\ \hline Research and development & 6,576 & 5,653 & 5,722 \\ \hline Marketing, general and administrative & 6,309 & 7,931 & 5,452 \\ \hline Restructuring and asset impairment charges & - & 231 & 710 \\ \hline Amortization of acquisition-related intangibles & 18 & 35 & 6 \\ \hline Operating expenses & 12,903 & 13,850 & 11,890 \\ \hline Operating income & 16,088 & 5,711 & 8,954 \\ \hline Gains (losses) on equity method investments, net* & 117 & (147) & (1,380) \\ \hline Gains (losses) on other equity investments, net & 231 & (23) & (376) \\ \hline Interest and other, net & 109 & 163 & 488 \\ \hline Income before taxes & 16,545 & 5,704 & 7,686 \\ \hline Provisions for taxes & 4,581 & 1,335 & 2,394 \\ \hline Net income & $11,964 & $4,369 & $5,292 \\ \hline \end{tabular} *This should be considered as operating income. \begin{tabular}{|c|c|c|} \hline Other long-term assets & 5,111 & 5,340 \\ \hline Total assets & $63,186 & 553,095 \\ \hline \multicolumn{3}{|l|}{ Liabilities } \\ \hline \multicolumn{3}{|l|}{ Current fiabilities } \\ \hline Short-term debt: & 538 & $172 \\ \hline Accounts payable & 2,190 & 1,883 \\ \hline Accrued compentation and benefits & 2,888 & 2,448 \\ \hline Accrued advertising & 1,007 & 773 \\ \hline Deferred income on shipments to distributors & 622 & 593 \\ \hline Other accrued liabilities & 2482 & 1,722 \\ \hline Total current liabilities & 9,227 & 7,591 \\ \hline Logg-term income taxes payable & 190 & 193 \\ \hline Longterm dnbt & 1,677 & 2,049 \\ \hline Long-term deferred tax liabilities. & 926 & 555 \\ \hline Other fong-term liabilitoes & 1,236 & 1,003 \\ \hline Total liabilities & 13,256 & 11,391 \\ \hline \multicolumn{3}{|l|}{ Stockholders equity: } \\ \hline Preferred stock, so,001 par value. & + & = \\ \hline & 16,178 & 14,993 \\ \hline & 333 & 393 \\ \hline \end{tabular} (b) compute net operating profit after tax (NOPAT) for 2010, assuming a federal and state statutory tax rate of 37%. HINT: Gainulosses an equity method imvestments are considered operating income. Round your answer to the nearest whole number. 2010 NOPAT =5 Forecast the terminat period yalue using the assumptions above and assuming a terminat period growth of: 16. (d) Estimate the value of a share of intel common stock using the discounted cash flow (DCF) model as or December 25, 2010; assume a discount tate (WNCCr of 11 is. common Instructions: \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{c} INTC \\ (5. millions) \end{tabular}} & \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{l} Reported \\ 2010 \end{tabular}}} & \multicolumn{4}{|c|}{ Forecast Horizon } & \multirow{2}{*}{\begin{tabular}{l} Terminal \\ Period \end{tabular}} \\ \hline & & & 2011 Est. & 2012 Est. & 2013 Est. & 2014 Est. & \\ \hline DCF Model & & & & & & & \\ \hline Increase in NOA & & & 0 & 0x & 0x & 0 & 0 \\ \hline FCFF (NOPAT - Increase in NOA) & & & 0 & 0 & 0 & 0 & 0 \\ \hline Discount factor- & & & 0 & 0 & 0 & 0 & \\ \hline Present value of horizon FCFF & & & 0 & 0x & 0x & 0 & \\ \hline Cum present value of horizon FCFF & s & 0 & & & & & \\ \hline Present value of terminal FCFF & & 0x & & & & & \\ \hline Total firm value & & 0x & & & & & \\ \hline NNO & & 0x & & & & & \\ \hline Firm equity value: & s & 0x & & & & & \\ \hline Shares outstanding (millions) & & 0x & & & & & \\ \hline Stock price per share & s & 0x & & & & & \\ \hline \end{tabular} Following are the income statement and balance sheet for Intel Corporation. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} INTEL CORPORATION \\ Consolidated Statements of Income \end{tabular}} \\ \hline Year Ended (In millions) & Dec. 25,2010 & Dec. 26, 2009 & Dec. 27,2008 \\ \hline Net revenue & $44,123 & $35,127 & $37,586 \\ \hline Cost of sales & 15,132 & 15,566 & 16,742 \\ \hline Gross margin & 28,991 & 19,561 & 20,844 \\ \hline Research and development & 6,576 & 5,653 & 5,722 \\ \hline Marketing, general and administrative & 6,309 & 7,931 & 5,452 \\ \hline Restructuring and asset impairment charges & - & 231 & 710 \\ \hline Amortization of acquisition-related intangibles & 18 & 35 & 6 \\ \hline Operating expenses & 12,903 & 13,850 & 11,890 \\ \hline Operating income & 16,088 & 5,711 & 8,954 \\ \hline Gains (losses) on equity method investments, net* & 117 & (147) & (1,380) \\ \hline Gains (losses) on other equity investments, net & 231 & (23) & (376) \\ \hline Interest and other, net & 109 & 163 & 488 \\ \hline Income before taxes & 16,545 & 5,704 & 7,686 \\ \hline Provisions for taxes & 4,581 & 1,335 & 2,394 \\ \hline Net income & $11,964 & $4,369 & $5,292 \\ \hline \end{tabular} *This should be considered as operating income. \begin{tabular}{|c|c|c|} \hline Other long-term assets & 5,111 & 5,340 \\ \hline Total assets & $63,186 & 553,095 \\ \hline \multicolumn{3}{|l|}{ Liabilities } \\ \hline \multicolumn{3}{|l|}{ Current fiabilities } \\ \hline Short-term debt: & 538 & $172 \\ \hline Accounts payable & 2,190 & 1,883 \\ \hline Accrued compentation and benefits & 2,888 & 2,448 \\ \hline Accrued advertising & 1,007 & 773 \\ \hline Deferred income on shipments to distributors & 622 & 593 \\ \hline Other accrued liabilities & 2482 & 1,722 \\ \hline Total current liabilities & 9,227 & 7,591 \\ \hline Logg-term income taxes payable & 190 & 193 \\ \hline Longterm dnbt & 1,677 & 2,049 \\ \hline Long-term deferred tax liabilities. & 926 & 555 \\ \hline Other fong-term liabilitoes & 1,236 & 1,003 \\ \hline Total liabilities & 13,256 & 11,391 \\ \hline \multicolumn{3}{|l|}{ Stockholders equity: } \\ \hline Preferred stock, so,001 par value. & + & = \\ \hline & 16,178 & 14,993 \\ \hline & 333 & 393 \\ \hline \end{tabular} (b) compute net operating profit after tax (NOPAT) for 2010, assuming a federal and state statutory tax rate of 37%. HINT: Gainulosses an equity method imvestments are considered operating income. Round your answer to the nearest whole number. 2010 NOPAT =5 Forecast the terminat period yalue using the assumptions above and assuming a terminat period growth of: 16. (d) Estimate the value of a share of intel common stock using the discounted cash flow (DCF) model as or December 25, 2010; assume a discount tate (WNCCr of 11 is. common Instructions: \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{c} INTC \\ (5. millions) \end{tabular}} & \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{l} Reported \\ 2010 \end{tabular}}} & \multicolumn{4}{|c|}{ Forecast Horizon } & \multirow{2}{*}{\begin{tabular}{l} Terminal \\ Period \end{tabular}} \\ \hline & & & 2011 Est. & 2012 Est. & 2013 Est. & 2014 Est. & \\ \hline DCF Model & & & & & & & \\ \hline Increase in NOA & & & 0 & 0x & 0x & 0 & 0 \\ \hline FCFF (NOPAT - Increase in NOA) & & & 0 & 0 & 0 & 0 & 0 \\ \hline Discount factor- & & & 0 & 0 & 0 & 0 & \\ \hline Present value of horizon FCFF & & & 0 & 0x & 0x & 0 & \\ \hline Cum present value of horizon FCFF & s & 0 & & & & & \\ \hline Present value of terminal FCFF & & 0x & & & & & \\ \hline Total firm value & & 0x & & & & & \\ \hline NNO & & 0x & & & & & \\ \hline Firm equity value: & s & 0x & & & & & \\ \hline Shares outstanding (millions) & & 0x & & & & & \\ \hline Stock price per share & s & 0x & & & & & \\ \hline \end{tabular} Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started