Question
Mephisto Inc. reported revenues of USD 20 million in 2021 whereas, the net profit margin was 30%. Revenues and net profits are expected to grow
Mephisto Inc. reported revenues of USD 20 million in 2021 whereas, the net profit margin was 30%. Revenues and net profits are expected to grow at 8% for the next 10 years. The net profit included Depreciation and amortization of USD 2 million which was determined using straight line method and is expected to remain the same. The company invested USD 1.5 million in working capital this year and the investment is expected to grow in line with the growth in profits. The Capex in 2021 stood at USD 1 million and the same is expected in the future periods. Estimate what the companys FCFE will be in 2026.
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