You are the head of the acquisitions department of a company. The potential investment in a steel manufacturing company, Steel Co., is currently under review. Below is some information about the projections. Show formulas for calculations

Question: Calculate the discounted cash flow value for Steel Co.

Year 2 Year 3 Year 4 Year 5 Year 6 After Year 6 Growth rate estimation 5% 3% 2% 4% 5% 3% EBIT $203,70 $157,400 $131,000 $133,000 $138,300 $140,000 A Assets $1 15,000 $102,000 $83,200 $38,00 $38,900 $40,200 A Operating liabilities $34,500 $34,500 $26,000 $9, 100 $9,300 $9,600 Number of outstanding shares 27,250 Current share price $20.91 Net debt $240,000 WACC 8% Inflation 3% Effective tax rate 10% Terminal growth rate 3% Terminal date Year 6 Extract from the reformatted income statement Year 0 Year 1 s of steel sold 26,000 33, 100 Selling price per ton $63 $620 Cost price per ton $540 $545 Sales $ 16,380,000 $20,522,000 Cost of goods sold 40,000 $ 18,039,500 Gross profit 2,340,000 2,482,500 Sales, general, and admin costs ,000 $248,250 Operating expenses $1,962,000 $2,040,250 EBIT $144,000 $194,000 Extract from the reformatted balance sheet Year 0 Year 1 Accounts receivable $1,723,400 $2,241,000 Inventory $2,480,00 $3,462,000 Other current assets $6,222,050 $5, 100,860 Ending PPE (net) $5,078,650 $5,093, 140 Total assets $15,504, 100 $15,897,000 Accounts payable $776,809 $1,042, 146 Other current liabilities $5,825,971 $5,284, 134 Long-term operating liabilities $3,941,020 $3,942,420 Capital $4,960,300 $5,628,300 Liabilities and owner's equity $15,504, 100 $15,897,000