Q15-Q17 are based on the following information: You are considering buying a company using leveraged buyout. The company is projected to have sales of 200 million in the first year after buyout. The cost of sales and other administrative expenses are 50% of the sale. Depreciation and amortization are 10% of the sale. Tax rate is 40%. There is no change in net working capital and no capital expenditure that you can foresee. You plan to borrow 750 3 3 million at interest rate of 6% per year and put 100 million of your own money as equity to buy the company. 15 What Price-to-EBITDA multiple are you paying for this company? a l b 7.5 c 8.5 d 10.6 e 40.5 16 What is the net income of the company in the first year after buyout? a 14 b 21 c 35 d 80 OF 17 Assuming all the cash flows are used to pay down debt after the first year, what is the interest expense of the company in the second year? a 21 38.75 b C 42.54 d 45.00 e 700