Your firm is beginning to enter its maturity phase, after many years of high investment and high growth. Your CFO has provided the assumptions below and asked you to forecast free cash flows for the next five years.

2024 8.0% 67.0% 13.0% Assumptions: Revenue growth COGS/Sales SG&A/Sales Tax rate Capex (net) / Sales Current Assets/Sales Current Liabilities/Sales 2020 12.0% 69.0% 12.0% 30.0% 5.0% 28.0% 12.0% 2021 11.0% 68.5% 12.0% 30.0% 5.0% 28.0% 12.0% 2022 10.0% 68.0% 12.5% 30.0% 4.5% 28.0% 12.0% 2023 9.0% 67.5% 12.5% 30.0% 4.5% 28.0% 12.0% 30.0% 4.0% 28.0% 12.0% Forecast 2022 2020 2021 2023 2024 Revenues Cost of Goods Sold Gross Profit Selling and administrative Operating Income Taxes NOPAT Capex, net of depreciation Change in NWC Free Cash Flow Actual 2019 10,000 7,000 3,000 1,200 1,800 500 1,300 500 100 700 Current Assets Current Liabilities Net Working Capital (NWC) 2,800 1,200 1,600 2024 8.0% 67.0% 13.0% Assumptions: Revenue growth COGS/Sales SG&A/Sales Tax rate Capex (net) / Sales Current Assets/Sales Current Liabilities/Sales 2020 12.0% 69.0% 12.0% 30.0% 5.0% 28.0% 12.0% 2021 11.0% 68.5% 12.0% 30.0% 5.0% 28.0% 12.0% 2022 10.0% 68.0% 12.5% 30.0% 4.5% 28.0% 12.0% 2023 9.0% 67.5% 12.5% 30.0% 4.5% 28.0% 12.0% 30.0% 4.0% 28.0% 12.0% Forecast 2022 2020 2021 2023 2024 Revenues Cost of Goods Sold Gross Profit Selling and administrative Operating Income Taxes NOPAT Capex, net of depreciation Change in NWC Free Cash Flow Actual 2019 10,000 7,000 3,000 1,200 1,800 500 1,300 500 100 700 Current Assets Current Liabilities Net Working Capital (NWC) 2,800 1,200 1,600