Question
Use Excel to solve please high rated expert pleaseee? QUESTION 1 Use the Free Cash Flow method of valuation and the following data, to calculate
Use Excel to solve please high rated expert pleaseee?
QUESTION 1
Use the Free Cash Flow method of valuation and the following data, to calculate the value for a venture with the following information. Expected sales at year zero (or beginning of year 1): $2.50 M; growth rate in sales for the first 8 years: 35%; and for years 9-on: 10%; Annual profit margin (or EBIAT/Sales) for all years=22%; Annual asset intensity ratio (or (FA+WC)/Sales) for all years = 32%; discount rate in years 1-8: 30%, and in years 9-on: 16%.
QUESTION 2
You are given the following information:
- Baseline (last year or year 1) sales: $12.00 million
- Sales growth rate for years 1-7: 45%
- Sales growth rate for years 8-10: 25%
- Sales growth rate for years 11-on: 8%
- Profit margin for years 1-10: 35%
- Profit margin for years 11-on: 18%
- Discount rate or cost of capital: 30% during years 1-10; and 12% for years 11-on.
Answer the following questions:
- What is the value of this company using the Fundamental Method of valuation?
- For $3.0 million investment, what portion of the company should be given up?
- Assume you are a financial consultant to the entrepreneur, and this entrepreneur has asked you to advise her regarding the $3.0 million financing. How will you go about advising your client? Outline your thought process in this regard
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