LG

Following is the seven-year forecast for LG: (all amounts in $000)

	2020	2021	2022	2023	2024	2025	2026
EBIT	$(1000)	$(900)	$200	$1,200	$2,500	$3000	$3,050
Capital Expenditures	$550	$350	$200	$175	$175	$160	$150
Changes in Working Capital	$400	$300	$200	$100	$100	($100)	($100)
Depreciation	$40	$80	$125	$150	$150	$150	$150

Beginning after year 2026 the annual growth in EBIT is expected to be 1.5%, a rate that is projected to be constant over LG remaining life as an enterprise. Beginning in 2026 LG capital expenditures and depreciation are expected to offset each other (capex - depreciation = 0) and year to year changes in working capital are expected to be zero (working capital levels remain constant year over year). For discounting purposes consider 2020 as year 1.

Assume a tax rate is 21% and a cost of capital of 7.75%

Calculate the fair market value (NPV) for LG. Assume that the Net Present Value of LG free cash flow for the period 2020 - 2026 is $3000