1. You are given the following information about a Moroccan SME (20 Points)

	Forecast period
In MAD Million	1	2	3	4	5	6
Sales Cost of Goods Sold EBITDA Depreciation EBIT Tax Profit after tax Investment in fixed assets Investment in working capital	47 20 27 5.2 21.8 5 16.8 12 2.2	49 24 25 6 19 4.5 14.5 10.8 2.3	51 27 24 7.5 16.5 4 12.5 9.2 1.8	55 30 25 7.8 17.2 4.2 13 8.4 1.6	58 35 23 8 15 3.8 11.2 8.1 2	63 41 22 8.5 13.5 3.2 10.3 6.5 2.2
Free Cash Flow

Free Cash Flows are expected to grow at steady rate of 4% starting year 6. The companys WACC is 8%.

1. Compute the FCF of each year of the forecasted period?
2. Compute the Present Value of future CF?
3. Compute the value of the firm?

2. Alpha company purchases materials on day 0 and pay for them on day 70. By day 50, Alpha has converted the raw materials purchased on day 0 into finished goods, which are then immediately and fully sold.

On day 80, Alphas customers pay for their purchases. (20 Points)

1. Compute Inventory period, Accounts receivables period and the operating cycle of Alpha?

2. Compute the Cash Cycle of the firm?

3. What impacts would a large Cash cycle have on the firms strategy?