Jaguar Project

This is the part I need help with

2) (40) How much is Jaguar worth in sterling at the beginning of 1984? (10) In order to focus on the issues related to risk management we provide a spreadsheet that with a framework for the valuation and the projected free cash flow for 1984 (see Jaguar.xls and the assumptions used in the next page). To finish the valuation you should make your own assumptions for 1985 and beyond. In particular, you should determine what are reasonable forecasts for the value of the $/ rate.(20) Furthermore, thoughts must be given to how these exchange rates will affect the prices and quantity of Jaguar cars sold in the U.S.(10)

I also attached instructions and the table

The Florida International University College of Business Administration FIN4604: International Financial Management Srping 2016 Dr Q. Kang General Instructions on Project The project analysis is due April 27, Wednesday, 11:59pm. Each group needs to submit only one written copy of the project analysis using the Blackboard's Assignment Dropbox. Write down each group member's name on the front page of the report. I will grade each group's project analysis according to the Rubrics posted in the Blackboard. Each member of the group will receive the same grade. Groups will be formed by the professor within one week after this instruction is distributed. Each group typically consists of four students. Please check the Grade Center at the Blackboard to find out your group members. Note that you are responsible for setting up a scheme to coordinate each group member's efforts on this project. Free-riders are NOT welcome. The group can vote with a majority to kick the free-rider out of his/her group - in that case, the one who is kicked out will receive zero grade on the project. You may find it useful to take a look at the slides: \"jaguar_introduction.ppt\Jaguar Valuation Base Case Project 1984 1985 1986 1987 1988 1989 1.350 1.350 1.323 1.324 1.297 1.298 1.271 1.273 1.245 1.248 1.220 1.224 2 U.S. growth, units(%) 12.00 6.0 4.0 2.0 2.0 2.0 3 U.S. volume, units 17,091 18,116 18,841 19,218 19,602 19,994 1 Dollar / Sterling United States 4 U.S. inflation (%) 3 3.0 3.0 3.0 3.0 3.0 25.631 26.400 27.192 28.008 28.848 29.713 6 U.S. sales, dollars 438,065 478,273 512,326 538,250 565,485 594,099 7 U.S. sales, sterling 324,492 361,507 395,149 423,616 454,133 486,849 324,493 361,507 395,149 423,616 454,133 486,849 12.00 4.0 2.0 2.0 2.0 2.0 14,792 15,384 15,691 16,005 16,325 16,652 5 5.0 5.0 5.0 5.0 5.0 17.284 18.148 19.056 20.008 21.009 22.059 255,662 279,186 299,008 320,238 342,975 367,326 13 Var. mfg. Cost/unit 13.521 14.197 14.907 15.652 16.435 17.257 14 Net working capital 30,000 33,130 35,895 38,465 41,219 44,170 0.18 0.18 0.18 0.18 0.18 0.18 16 Total revenues 580,154 640,693 694,157 743,854 797,108 854,175 17 Var. cost of sales 431,090 475,603 514,772 551,321 590,465 632,388 10,000 12,000 14,000 16,000 18,000 20,000 19 R&D 18,000 18,900 19,845 20,837 21,879 22,973 20 Distribution 13,965 14,663 15,396 16,166 16,975 17,823 21 Administration 23,100 24,255 25,468 26,741 28,078 29,482 496,155 545,421 589,481 631,066 675,397 722,666 23 EBIT 83,999 95,271 104,676 112,788 121,711 131,509 24 Tax 29,400 33,345 36,637 39,476 42,599 46,028 25 EBIAT 54,599 61,926 68,039 73,312 79,112 85,481 26 Depreciation 10,000 12,000 14,000 16,000 18,000 20,000 27 Operating cash flow 64,599 73,926 82,039 89,312 97,112 105,481 28 Increase in NWC 30,000 3,130 2,765 2,570 2,754 2,951 29 Capital expenditures 11,500 13,800 16,100 18,400 20700 23000 30 Free cash flow 23,099 56,996 63,175 68,342 73,659 79,530 23,099 48,302 45,371 41,595 37,992 302,173 5 US$ price/unit Rest of World (ROW) 8 Growth, units (%) 9 Volume, units 10 Inflation, sterling (%) 11 Price/unit, sterling 12 R.O.W. sales, sterling 15 Discount rate, sterling 18 Depreciation 22 Total costs 31 Terminal Value 32 PV. Free cash flow 33 Sum, PV of FCF 611,769 498,533 Forecast rate Exhibit 1 Balance Sheet (Millions) December 31 1982 1981 March 31, 1984 1983 118.6 0.4 119.0 112.0 0.4 112.4 87.3 55.7 87.3 55.7 76.5 42.5 11.5 130.5 62.7 33.8 29.5 126.0 68.8 29.6 6.9 105.3 56.3 26.3 1.3 83.9 Creditors: amount falling due withing one year Net Current Assets (liabilities) 127.5 3.0 128.8 (2.8) 81.1 24.2 51.3 32.6 Total Assets less Current Liabilities 122.0 109.6 111.5 88.3 Creditors: amounbts falling due in more than one year 58.0 64.0 43.9 65.7 17.6 93.9 1.2 87.1 45.0 2.8 16.2 10.3 55.4 64.0 65.7 93.9 93.9 87.1 87.1 Fixed Assets Tangible Assets Investments in related company Current Assets Stocks Debtors Cash and Short Term Deposit Capital and Reserves Called up share capital Other reserves Profit and loss acount BL Group funding balance Income Statement (Millions) Quarter ended 31-Mar-84 Turnover Continuing activities Discountinued activities Years Ended December 21 1983 1982 1981 1960 Exhibit 3 Jaguar Sales by Models and Markets/December 31th Model Range 1980 1981 1982 1983 Series III Saloons XJ-S Sports Cars Limousines 13,851 1,526 92 12,666 1,108 159 17,733 3,131 143 23,413 4,886 168 TOTAL JAGUAR 15,469 13,933 21,007 28,467 Geographical Area 1980 % 1981 % 1982 % 1983 % United States United Kingdom West Germany Rest of Europe Australia Canada Rest of World 2,518 6,135 1,612 3,539 140 305 1,220 16% 40% 10% 23% 1% 2% 8% 5,154 5,196 479 1,229 654 375 846 37% 37% 3% 9% 5% 3% 6% 9,971 6,415 839 1,742 582 280 1,178 47% 31% 4% 8% 3% 1% 6% 15,260 7,236 1,164 1,845 579 563 1,820 54% 25% 4% 6% 2% 2% 6% 15,469 100% 13,933 100% 21,007 100% 28,467 100% TOTAL JAGUAR