1. PART II:

   Firm X is considering performing a considerable investment in year 2020. The value of Firm X (as of the end of 2019) if the investment is done is estimated at $306,769,521.

   Table II.a	Firm Value: Not doing the Expansion	2019	2020	2021	2022	2023	2024
   	Free Cash Flow of Firm		5,233,648	5,235,964	5,238,839	5,242,190	5,245,946
   	EBITDA						7,643,182
   	Interest Tax Shield		60,000	60,000	60,000	60,000	60,000

   Assume a discount factor of 10% for the Free Cash Flows and the Continuation Value, and 10% for the Interest Tax Shield. Assume that the EBITDA Multiple is 2. What is the Present Value (as of the end of December 2019) of the Free Cash Flows forecast of Firm X if the firm where not to do the expansion?"

10 points

QUESTION 17

1. What is the Present Value (as of the end of December 2019) of the Continuation Value forecast of Firm X if the firm where not to do the expansion?

10 points

QUESTION 18

1. What is the Present Value (as of the end of December 2019) of the Interest Tax Shield forecast of Firm X if the firm where not to do the expansion?

10 points

QUESTION 19

1. What is the Firm Value (as of the end of December 2019) of Firm X if the firm where not to do the expansion?

10 points

QUESTION 20

1. "True or False: Firm X should do the expansion (according to the NPV). Recall the Value of Firm X if the expansion is performed is estimated to be $306,769,521."

   True

   False

10 points