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You want evaluate Firm A . You know the following data from Firm A balance sheet and income statement ( see image ) . You

You want evaluate Firm A. You know the following data from Firm A balance sheet and income statement (see image).
You make the following assumptions:
- You forecast that, in 2028, firm A will have an EBIT equal to 4 times that of 2022(260,000 euros)
- Accounts Receivables will remain equal to 5% of Revenues from Sales
- Accounts Payables will remain equal to 3% of Revenues from Sales
- Inventories will remain equal to 1% of Revenues from Sales
-Corporate tax rate is 30%
- Firm A will buy machinery worth e10,000 in 2023. The machinery will be fully depreciated between 2024 and 2028 in equal installments. Existing assets fully depreciate in2022.
-Firm A is an all equity firm, its CAPM beta is 0.85, the annual market return is 6% and the risk free rate is 1%
Your task is as follows:
1. Estimate the value of the firm at the end of 2023 using discounted cash flow analysis.
-Please note that there is no single best answer, but you will have to make additional assumptions about the evolution of income statement and balance sheet quantities.
-Note that the firm will not be liquidated at the end of 2023 but it is expected to stay in business for a very long period. Make the necessary assumptions
2. Now imagine that by the end of 2023 Firm A will take out perpetual debt worth 40000 euros, with an annual coupon rate of 5%. As a result, the capital structure of the firm will be made of 60% of equity and 40% of debt and it is supposed to remain this way indefinitely. Does the value of Firm A at the end of 2023 change? If so, why and how?
Please try to solve this for me, it would be greatly appreciated!
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