You reviewed the books your parents gave you as you have considered assuming the family business?You?ve accepted the offer.Congratulations.You are now an entrepreneur.

You?ve decided that the business can grow in 2017 based upon some key markets that you can penetrate immediately, due to your networking and marketing skills learned while in the IU Division of Business at IUPUC.Based on your analysis, you create a pro forma financial summary:

Financial Pro Forma Forecast Summary for 2017 (all numbers in thousands of USD)

Net Sales1,200

COGS 500

Depreciation 260

Interest expense 110

Taxes paid60

Dividends20

Total Assets2,000

Net capital spending200

Net increase in

Working capital30

Net new borrowing100

Total interest-bearing

Debt as of 12/311,900

1.Cash flow from assets

2.How much net new equity was raised (or retired)?

3.GIVEN:Risk free rate (RFR) = 4%Beta = 2.5ERP = 7.5%D/E = 4.0

cost of debt (prior to tax adjustment) = 6.5%tax rate = 33%

FIND:WACC

4.GIVEN:EBIT = 6,000Depreciation = 250Taxes = 100

Net Cap Ex = 250Net Increase in Working Capital = 100

FIND:CFFA

5.GIVEN:Net Income = 5,000Depreciation = 250Interest Expense = 750

Net Cap Ex = 275Net increase in Working Capital = 10

FIND:CFFA

6.GIVEN:RFR = 1.75%Beta = 2.0 ERP = 8.0%D/E = 0.5

Cost of debt (prior to tax adjustment) = 5.0%tax rate = 40%

FIND:WACC