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The following forecast were made at the end of 2020 for a firm with net operating assets of $1,600 million and net financial obligations of

The following forecast were made at the end of 2020 for a firm with net operating assets of $1,600 million and net financial obligations of $550 million (in millions of dollars).

QUESTION 4 The following forecast were made at the end of 2020 for a firm with net operating assets of $1,600 million and net financial obligations of $550 million (in millions of dollars). 2021 2022 2023 2024 Operating income $180 $195 $207 $221 Net operating assets 1,270 1,350 1,480 1,620 The required return for operations is 10 percent. Required: (a) Calculate residual operating income for 2021 to 2024. (6 marks) (b) Calculate the value of the operations assuming that the growth in residual operating income in 2024 from 2023 will continue after 2024. (4 marks) (c) Calculate the value of equity. (2 marks) Attach File Browse Local Files Browse Dropbox

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