ou are the CEO of a major conglomerate in $2024,$ and are thinking of acquiring a

tech company. You are wondering what price would be appropriate to offer. You take

a look at the company$$s financial statements, and see that they expect the following

accounting numbers for the next $4$ years $($in thousands of dollars$)$:

$2025202620272028$

EBIT $5,0007,0008,0009,000$

CAPEX $3,0003,5004,0005,000$

Depreciation $100300400600$

Accounts Receivable $6008001,0001,000$

Accounts Payable $4009001,0001,000$

The current corporate tax rate is $35\%.$ The company$$s cost of capital is $12\%.$ The

company says that it will be able to sustain its cash flows at the $2028$ level indefinitely

after $2028.$

$($a$)$ What are the free cash flows of the tech company from $2025$ to $2028?($Note: you

can assume that net working capital in $2024$ is $0.)$

$($b$)$ What is the terminal value of the company as of $2028?$ What is the present value

of this terminal value?

$($c$)$ What is the total enterprise value of the company in $2024?$