Tax Rate = 35%

Question 1 part one) Use a 20% growth rate and forecast next years financial statements assuming the following: sales and cost of goods sold increase at the same rate; interest expense remains the same percentage of long-term debt; depreciation expense remains the same percentage of total fixed assets; current assets, current liabilities, and fixed assets increase at the same rate as sales; no new equity is issued. What is the external financing needed?

Under the same assumptions as above, forecast the next five years of growth using debt as the plug. Calculate free cash flow for the forecasted years. Does this seem sustainable in the long run?

Question 1 part 2) If the free cash flows will grow by 3% per year indefinitely after five years have passed and the required return is 15%, what is the terminal value of the firm in five year?

What is the value of the firm today, based on the above?

2013 cells should be shifted over	2014
sales		2100
Cost of Goods Sold		1200
Depreciation Expense		225
Interest Expense		175
Current Assets	1000	1300
Total Fixed Assets	3500	4000
Accumulated Depreciation	1250	This can be determined from the information given
Current Liabilities	900	975
Long-term Debt	1500	1350
Common Stock	400	This can be determined from the information given