The Question 1 tab of the spreadsheet contains the most recent (Year 0) income statement for Flitwick Corporation. Youll need to forecast the next 5 years of the income statement (including the Free Cash Flow) using the following assumptions: Sales will grow by 13% each year. COGS and SG&A will be forecast using the percent of sales technique. Depreciation will grow by 9% each year. Interest expense will grow by 11% each year. Flitwicks tax rate is 31%. CapEx and Change in NWC will grow by 12% each year. At the end of year 5, you will sell the company for $40,000,000 (note: this number should be added to the year 5 free cash flow). The appropriate discount rate is 16%. Once youve estimated the free cash flows, find the value of the firm (i.e. the present value of the free cash flows.)

Flitwick Corporation
	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	$ 51,000,000
Cost of Goods Sold	$ 29,500,000
Gross Profit
Selling, General and Administrative Costs	$ 7,800,000
Depreciation	$ 3,300,000
Earnings Before Interest and Tax (EBIT)
Interest Expense	$ 2,100,000
Earnings Before Tax
Taxes (31%)
Net Income
Operating Cash Flow
CapEx	$ 3,250,000
Change in NWC	$ 2,200,000
Free Cash Flow