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Scan Corp. is expected to have the following cash flows for the next two years. After year two the free cash flows are expected to
Scan Corp. is expected to have the following cash flows for the next two years. After year two the free cash flows are expected to grow at 2 percent indefinitely. The company's WACC is 7.5 percent and the tax rate is 35 percent. Write the full DCF equation for valuing Scan Corp, using the free cash flows based on the numbers in the below table. You don't have to calculate the current enterprise value of Scan Corp. You have to show the annual free cash flows, but you don't have to calculate the current enterprise value of Scan Corp. Year 1 Year 2 EBIT $1,900 $2,090 Depreciation $165 $182 Taxes $665 $732 Capital spending $115 $127 Change in NWC $94 $85
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