Sisyphus Corp. has projected that their performance for the next five years results to the following: YEAR Revenue Cash Operating Expenses 1 50 30 2 55.00 33.00 3 60.50 36.30 4 66.55 39.93 5 73.21 43.92 Terminal value was assumed based on the growth rate of the cash flows. The annual Capital investment requirement is at P2 million. The income Tax rate is at 30%. The required rate of return for their business is 14%. Requirement: How much is the Free Cash Flow for years 1-5? How much is the Discounted Net Cash Flows to the Firm for years 1-5?
Sisyphus Corp. has projected that their performance for the next five years results to the following: YEAR Revenue Cash Operating Expenses 1 50 30 2 55.00 33.00 3 60.50 36.30 4 66.55 39.93 5 73.21 43.92 Terminal value was assumed based on the growth rate of the cash flows. The annual Capital investment requirement is at P2 million. The income Tax rate is at 30%. The required rate of return for their business is 14%. Requirement: How much is the Free Cash Flow for years 1-5? How much is the Discounted Net Cash Flows to the Firm for years 1-5?
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 11P
Related questions
Question
- Sisyphus Corp. has projected that their performance for the next five years results to the following:
YEAR |
Revenue |
Cash Operating Expenses |
1 |
50 |
30 |
2 |
55.00 |
33.00 |
3 |
60.50 |
36.30 |
4 |
66.55 |
39.93 |
5 |
73.21 |
43.92 |
Terminal value was assumed based on the growth rate of the cash flows. The annual Capital investment requirement is at P2 million. The income Tax rate is at 30%. The required
Requirement:
- How much is the
Free Cash Flow for years 1-5? - How much is the Discounted Net Cash Flows to the Firm for years 1-5?
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