Question
The following questions are based on the company Merck. Alternative strategies (giving advantages and alternatives for each)Pro-Forma Financial Statements (I/S, B/S and Statement of Cash
The following questions are based on the company Merck.
Alternative strategies (giving advantages and alternatives for each)Pro-Forma Financial Statements (I/S, B/S and Statement of Cash Flows) with deltas out 3 years and analysis Each year must have 2 columns: 1 with your strategy and 1 without your strategy.Include Pro-Forma ratios for the first year out with deltas contrasting from the most current years ratios.Net Present Value analysis of proposed strategys new cash flow and EPS/EBIT analysis NOTE: To construct the first cash flow (cf1) at the very minimum, the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources).1.Alternative strategies (givingadvantages and alternatives for each)2.Pro-Forma Financial Statements (I/S,B/S and Statement of Cash Flows) with deltas out 3 years and analysis Each year must have 2 columns: 1 with your strategy and 1 without yourstrategy.
a.Include Pro-Forma ratios for thefirst year out with deltas contrasting from the most current years ratios.
3.Net Present Value analysis ofproposed strategys new cash flow and EPS/EBIT analysis NOTE: To construct the first cash flow (cf1) at the very minimum,the new revenue from your strategy(s) must be discounted back to the presentvalue by calculating EBIT and that figure will be your cfn for eachyear. cf0 (initial cost of your strategy), cf1(discounted cash flow first year), r (opportunity cost of capital, the rate ofthe next best alternative use of cash/debt/equity resources).
NPV=-cf0+ cf11+r1+cf21+r2+cf31+r3cfn1+rn
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