PLEASE SOLVE THIS
Intro It is the end of 2022. You're a financial analyst working for Apple. The company is considering producing a new wearable television set and is predicting the following sales (in 9 million). Assume all cash flows occur at the end of the year B D E F 1 2023 2024 2025 2026 2027 Sales 80 104 124.8 137.28 137.97 COGS and SG&A are expected to add up to 60% of sales and depreciation is expected to be 10% of sales. After 2027, sales are expected to grow by 0.5% forever. To start production at the beginning of 2023, Apple has to invest $100 million now to build a new factory. After 2023, the factory needs to be expanded to maintain the same fixed asset turnover (saleset fixed assets) as in 2023. Net working capital consists mainly inventory of electronics components, minus some current liabilities. Net working capital is expected to be always 30% of sales. Apple has a beta of 0.75. Its target capital structure weight for equity is 95% and the expected return on the S&P 500 is 5.4%. The average yield on its bonds is 6%, while the yield on Treasury bonds is 2%. The project is considered to be as risky as the firm overall. Apple's marginal tax rate is 33%. Part 1 IB Attempt 1/10 for 10 pts. Open a spreadsheet with a blank tab and name it CF, for cash flows. Duplicate the table above and extend it to find the operating cash flow for each year. What is the operating cash flow for 2027 (in $ million)? 1+ decimals Submit Part 2 Is Attempt 1/10 for 10 pts. Extend the spreadsheet to find net capital spending for each year. What is NCS for 2027 (in $ million)? 1+ decimals Submit Intro It is the end of 2022. You're a financial analyst working for Apple. The company is considering producing a new wearable television set and is predicting the following sales (in 9 million). Assume all cash flows occur at the end of the year B D E F 1 2023 2024 2025 2026 2027 Sales 80 104 124.8 137.28 137.97 COGS and SG&A are expected to add up to 60% of sales and depreciation is expected to be 10% of sales. After 2027, sales are expected to grow by 0.5% forever. To start production at the beginning of 2023, Apple has to invest $100 million now to build a new factory. After 2023, the factory needs to be expanded to maintain the same fixed asset turnover (saleset fixed assets) as in 2023. Net working capital consists mainly inventory of electronics components, minus some current liabilities. Net working capital is expected to be always 30% of sales. Apple has a beta of 0.75. Its target capital structure weight for equity is 95% and the expected return on the S&P 500 is 5.4%. The average yield on its bonds is 6%, while the yield on Treasury bonds is 2%. The project is considered to be as risky as the firm overall. Apple's marginal tax rate is 33%. Part 1 IB Attempt 1/10 for 10 pts. Open a spreadsheet with a blank tab and name it CF, for cash flows. Duplicate the table above and extend it to find the operating cash flow for each year. What is the operating cash flow for 2027 (in $ million)? 1+ decimals Submit Part 2 Is Attempt 1/10 for 10 pts. Extend the spreadsheet to find net capital spending for each year. What is NCS for 2027 (in $ million)? 1+ decimals Submit
