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please fill out the table with the data above To complete Course Project 2, you will need to estimate future cash flows for a firm

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please fill out the table with the data above

To complete Course Project 2, you will need to estimate future cash flows for a firm and then apply discounted cash flow analysis to estimate the value of a firm. You will then need to decide if you would sell the firm at a specific price. This project must be submitted as an Excel file. You have until midnight on the due date to turn in the project by Blackboard. Any late project will be accepted at my discretion depending on the degree of lateness. Your work must be submitted as a readable Excel file. The project is worth a total of 25 points. To receive all 25 points, you should make sure to fully complete the Excel file while following all directions. You should only hard code (aka type directly) into the grey cells. All of the other cells (blue, green, orange) should only include formulas and cell references. Failure to follow this will result in a significant or total loss of points. All work should be 100% your own, and any suspicion of academic dishonesty will be fully pursued according to university policies in addition to receiving a 0/25 on this project. See below for the point breakdown and rubric. Project Problem 1. Organic Micros was established 8 years ago by Mary Mendoza. The firm reported EBIT this year of $80,000. Mary typically reports about $2,000 in personal expenses through the firm each year. She also pays herself a salary of $60,000 despite the market rate for such a position being closer to $30,000. 2. The firm currently reports $10,000 in depreciation expenses every year. 3 . The firm will need $25,000 of inventory replaced in year 1 and will also require the replacement of equipment during year 4 in an amount totaling $50,000. 4. The firm currently has outstanding debt of $400,000. The firm has been historically financed in a way that 30% of funds are a result of debt financing. The cost of this debt financing is estimated to be 12% while the cost of equity financing is estimated at 22%. 5. Mary originally invested $120,000 of her own funds in the firm which establishes a cost basis for the firm of $120,000. Mary typically falls in a tax bracket that results in a total tax rate of 40%. 6. Based on the firm's maturity and the state of the industry, it is estimated the EBIT will increase by 9% each year for the next 5 years. Beyond this time frame, a reasonable estimate of growth is neither possible nor relevant. \begin{tabular}{|l|l|} \hline Current EBIT & \\ \hline Owner's Salary & \\ \hline Reasonable Salary & \\ \hline Depreciation & \\ \hline Personal Expenses & \\ \hline New Equipment & \\ \hline Inventory Investment & \\ \hline Estimated Growth Rate & \\ \hline Tax Rate & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Weight Of Debt & \\ \hline Weight Of Equity & \\ \hline Cost Of Debt & \\ \hline Cost Of Equity & \\ \hline WACC & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Value Of Firm & \\ \hline Basis Of Firm & \\ \hline Gain & \\ \hline Taxes Owed & \\ \hline Value Of Debt & \\ \hline Net Proceeds & \\ \hline Sell For $900k? & \\ \hline Sell For $700k? & \\ \hline \end{tabular} To complete Course Project 2, you will need to estimate future cash flows for a firm and then apply discounted cash flow analysis to estimate the value of a firm. You will then need to decide if you would sell the firm at a specific price. This project must be submitted as an Excel file. You have until midnight on the due date to turn in the project by Blackboard. Any late project will be accepted at my discretion depending on the degree of lateness. Your work must be submitted as a readable Excel file. The project is worth a total of 25 points. To receive all 25 points, you should make sure to fully complete the Excel file while following all directions. You should only hard code (aka type directly) into the grey cells. All of the other cells (blue, green, orange) should only include formulas and cell references. Failure to follow this will result in a significant or total loss of points. All work should be 100% your own, and any suspicion of academic dishonesty will be fully pursued according to university policies in addition to receiving a 0/25 on this project. See below for the point breakdown and rubric. Project Problem 1. Organic Micros was established 8 years ago by Mary Mendoza. The firm reported EBIT this year of $80,000. Mary typically reports about $2,000 in personal expenses through the firm each year. She also pays herself a salary of $60,000 despite the market rate for such a position being closer to $30,000. 2. The firm currently reports $10,000 in depreciation expenses every year. 3 . The firm will need $25,000 of inventory replaced in year 1 and will also require the replacement of equipment during year 4 in an amount totaling $50,000. 4. The firm currently has outstanding debt of $400,000. The firm has been historically financed in a way that 30% of funds are a result of debt financing. The cost of this debt financing is estimated to be 12% while the cost of equity financing is estimated at 22%. 5. Mary originally invested $120,000 of her own funds in the firm which establishes a cost basis for the firm of $120,000. Mary typically falls in a tax bracket that results in a total tax rate of 40%. 6. Based on the firm's maturity and the state of the industry, it is estimated the EBIT will increase by 9% each year for the next 5 years. Beyond this time frame, a reasonable estimate of growth is neither possible nor relevant. \begin{tabular}{|l|l|} \hline Current EBIT & \\ \hline Owner's Salary & \\ \hline Reasonable Salary & \\ \hline Depreciation & \\ \hline Personal Expenses & \\ \hline New Equipment & \\ \hline Inventory Investment & \\ \hline Estimated Growth Rate & \\ \hline Tax Rate & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Weight Of Debt & \\ \hline Weight Of Equity & \\ \hline Cost Of Debt & \\ \hline Cost Of Equity & \\ \hline WACC & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Value Of Firm & \\ \hline Basis Of Firm & \\ \hline Gain & \\ \hline Taxes Owed & \\ \hline Value Of Debt & \\ \hline Net Proceeds & \\ \hline Sell For $900k? & \\ \hline Sell For $700k? & \\ \hline \end{tabular}

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