80.2K

Verified Solution

Link Copied!

2021E 2022E 2023E 2024E 2025E Live Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) Interest Rate Effective Tax Rate Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) Scenario Inputs Base Case Income Statement Assumptions Annual Sales Growth (%) Cost of Sales (% of Sales) SG&A Expense % of Sales) 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0%! 40.0% 10.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0%! 5.0% 25.0% 5.0% 25.0% 30 30 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 25 25 $20,000 $0 30 25 $20,000 $0 30 25 $20,000 $0 30 25 $20,000 $0 $20,000 $0 Low Case 3.0% 3.0% Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) 45.0% 15.0% 3.0% 45.0% 15.0% 3.0% 45.0% 15.0% 45.0% 15.0% 3.0% 45.0% 15.0% 5.0% 5.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 25.0% 25.0% 50 50 50 50 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 201 20 50 20 $15,000 $0 20 $15.000 $0 $15,000 $0 $15,000 20 ------ $15,000 $0 $0 High Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) 8.0% 30.0% 8.0% 30.0% 8.0% 8.0% 30.0% 8.0% 8.0% 30.0% 8.0% 8.0% 30.0% -------- 8.0% 8.0% 5.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 25.0% 20 20 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 30 $30,000 $0 30 $30,000 $0 20 30 $30,000 $0 20 30 $30,000 $0 20 30 $30,000 $0 ---------- Case Study 2-A Time Remaining 02:46:59 Download Case Study A, take all provided assumptions as given to complete the financial model and answer the following 7 questions. StartupCo commenced operations at the beginning of 2020. $125 million of equity was raised to fund the purchase of equipment as well as for general corporate purposes. As part of its business planning process, a 5-year forecast was developed (Base Case) as well as upside and downside scenarios (High and Low Cases, respectively). At the end of 2020, StartupCo issued $150 million of 5-year debt, repayable in equal annual installments at the end of each year, to finance its future capital program. 2 Using the Low Case, calculate total depreciation expense for the year 2025E. Review Later $11,500 $14,875 OOOO $9,775 $17,500 2021E 2022E 2023E 2024E 2025E Live Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) Interest Rate Effective Tax Rate Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) Scenario Inputs Base Case Income Statement Assumptions Annual Sales Growth (%) Cost of Sales (% of Sales) SG&A Expense % of Sales) 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0% 40.0% 10.0% 6.0%! 40.0% 10.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0%! 5.0% 25.0% 5.0% 25.0% 30 30 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 25 25 $20,000 $0 30 25 $20,000 $0 30 25 $20,000 $0 30 25 $20,000 $0 $20,000 $0 Low Case 3.0% 3.0% Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) 45.0% 15.0% 3.0% 45.0% 15.0% 3.0% 45.0% 15.0% 45.0% 15.0% 3.0% 45.0% 15.0% 5.0% 5.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 25.0% 25.0% 50 50 50 50 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 201 20 50 20 $15,000 $0 20 $15.000 $0 $15,000 $0 $15,000 20 ------ $15,000 $0 $0 High Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) 8.0% 30.0% 8.0% 30.0% 8.0% 8.0% 30.0% 8.0% 8.0% 30.0% 8.0% 8.0% 30.0% -------- 8.0% 8.0% 5.0% Interest Rate Effective Tax Rate 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 5.0% 25.0% 25.0% 20 20 Balance Sheet Assumptions Accounts Receivable (Days) Accounts Payable (Days) Capital Expenditures Equity Issued (Repaid) 30 $30,000 $0 30 $30,000 $0 20 30 $30,000 $0 20 30 $30,000 $0 20 30 $30,000 $0 ---------- Case Study 2-A Time Remaining 02:46:59 Download Case Study A, take all provided assumptions as given to complete the financial model and answer the following 7 questions. StartupCo commenced operations at the beginning of 2020. $125 million of equity was raised to fund the purchase of equipment as well as for general corporate purposes. As part of its business planning process, a 5-year forecast was developed (Base Case) as well as upside and downside scenarios (High and Low Cases, respectively). At the end of 2020, StartupCo issued $150 million of 5-year debt, repayable in equal annual installments at the end of each year, to finance its future capital program. 2 Using the Low Case, calculate total depreciation expense for the year 2025E. Review Later $11,500 $14,875 OOOO $9,775 $17,500

Answer & Explanation Solved by verified expert

See Answer