One company that the analysis indicated as potentially suitable for acquisition by Admiral is Favorite Food Systems Inc. Favorite Food Systems Inc. which was founded by John Favorite in 1994, is a West Coast chain with current annual sales of approximately $75 million. In 2003, the company went public. (The Favorite family now controls about 57 percent of the common stock.)

Synergy of 1.0M. What would be the 5 years free cash flow, assuming $100,000 of depreciation for each year.

Admiral Foods Corporation Income Statement (in Millions of Dollars) Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) Favorite Food Systems, Inc. Income Statement (in Millions of Dollars) SalesLess:[xpenses,excludingdepreciationLess:DepreciationCamingsbeforeinterestandtaxesLess:InterestCamingsbeforetaxesLess:Taxes(40%)Carningsaftertaxes$75265.4$8.41.40.4$8.03.2$4.8$30 Additional Information \begin{tabular}{lcc} & Admiral Foods Corporation & Favorite Food Systems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (price per share) & $50 & $15 \end{tabular} Admiral Foods Corporation Income Statement (in Millions of Dollars) Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) Favorite Food Systems, Inc. Income Statement (in Millions of Dollars) SalesLess:[xpenses,excludingdepreciationLess:DepreciationCamingsbeforeinterestandtaxesLess:InterestCamingsbeforetaxesLess:Taxes(40%)Carningsaftertaxes$75265.4$8.41.40.4$8.03.2$4.8$30 Additional Information \begin{tabular}{lcc} & Admiral Foods Corporation & Favorite Food Systems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (price per share) & $50 & $15 \end{tabular}