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15-What is the Present Value (at December 2016) of the Free Cash Flows forecast for Corporation Y if the firm where not to do the expansion?

16-What is the Present Value (at December 2016) of the Continuation Value forecast for Corporation Y if the firm where not to do the expansion?

17-What is the Present Value (at December 2016) of the Interest Tax Shield forecast for Corporation Y if the firm where not to do the expansion?

18-What is the estimated Firm Value (at December 2016) for Corporation Y if the firm where not to do the expansion?

19-Considering that the Firm Value for Corporation Y (at December 2016) if the firm where to do the expansion is estimated at $502519159. What is the Net Present Value of the investment expansion?

20-According the NPV, Corporation Y should do the expansion.

True

False

Use the following information on Company Y for ultimately estimating the net present value of the expansionary investment and answers questions (15)-(20). Consider the following forecasts for 2017-2021 of the Future Cash Flows, EBITDA and Future Interest Tax Shield for Company Y if the expansion were not to occur. Assume that the EBITDA Multiple for the industry Company Y belongs to is 9.95. Assume a discount factor of 9% for the Free Cash Flows and for the Continuation Value, and a discount factor of 5% for the Interest Tax Shield. *Hint: You have sufficient information to calculate the Interest Tax Shield Firm Value 2017 2018 2020 2021 Free Cash Flow of Firm 26,820,76930,500,33232,639,864 34,929,16337,378,712 EBITDA 61,229,798

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