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Assume a discount rate (WACC) of 10%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(37,113) million (NNO is negative which means that Cisco has net nonoperating investments). (f) Estimate the value of a share of Cisco common stock as of July 30, 2016 using the discounted cash flow (DCF) model and sales, NOPAT and NOA forecast in (e); (g) If Ciscos top management were optimistic about CISCOs market growth opportunities and revised their sales growth rates up by 2%, please forecast Cisco's sales, NOPAT, and NOA for years 2017 through 2020 and the terminal period using the following assumptions:

Cisco Systems Inc Consolidated Statements of Income Years Ended December (S millions Julv 30, 2016 July 25, 2015 evenue $37,254 11.993 49 247 $37,750 11,411 49,161 Product Service Total revenue st of sales Product Service 14,161 4,126 18,287 30,960 15,377 4,103 19.480 29,681 otal cost of sales ross margin rating expenses Research and development Sales and marketing General and administrative Amortization of purchased intangible assets Restructuring and other charges 6.296 9,619 1,814 303 268 18,300 12.660 6,207 9,821 2,040 359 484 18,911 10,770 Total operating expenses ating income est income terest expense ther income (loss), net terest and other income (loss), net come before provision for income taxes 1,005 (676) (69) 260 769 (566) 228 431 12,920 2,181 11,201 2,220 vision for income taxes et income $10,739 $8,981 Cisco Systems Inc. Consolidated Balance Sheets n millions, except par value July 30, 2016 July 25, 201!5 ssets assets Cash and cash equivalents Investments $7,631 58,125 $6,877 53,539 Accounts receivable, net of allowance for doubtful accounts of S2495 842 at July 30, 2016 and $302 at July 25, 2015 Inventorie:s Financing receivables, net Other current assets 5,344 1,627 4,491 1,490 73,368 3,332 3,858 24,469 2,376 4,454 1,516 $113,373 1,217 4,272 1.627 78,719 Total current assets and equipment, net 3,506 4,158 26,625 2,501 4,299 1.844 $121.652 Financing receivables, net dwill d intangible assets, net ferred tax assets assets otal assets abilities ent liabilities Short-term debt Accounts payable Income taxes payable Accrued compensation Deferred revenue Other current liabilities $4,160 1,056 517 2,951 10,155 6.072 $3,897 1,104 62 3,049 9,824 47 Total current liabilities 24,911 23,412 21,457 1,876 5,359 1,562 53,666 ng-term debt 24,483 925 6,317 1431 58,067 taxes payable ferred revenue long-term liabilities Total liabilities Sales growth 2017 Sales growth 2018-2020 Terminal growth Net operating profit margin2016 rate rounded to three decimal places Net operating asset turnover 3% 490 190 2016 rate rounded to three decimal places Cisco Systems Inc Consolidated Statements of Income Years Ended December (S millions Julv 30, 2016 July 25, 2015 evenue $37,254 11.993 49 247 $37,750 11,411 49,161 Product Service Total revenue st of sales Product Service 14,161 4,126 18,287 30,960 15,377 4,103 19.480 29,681 otal cost of sales ross margin rating expenses Research and development Sales and marketing General and administrative Amortization of purchased intangible assets Restructuring and other charges 6.296 9,619 1,814 303 268 18,300 12.660 6,207 9,821 2,040 359 484 18,911 10,770 Total operating expenses ating income est income terest expense ther income (loss), net terest and other income (loss), net come before provision for income taxes 1,005 (676) (69) 260 769 (566) 228 431 12,920 2,181 11,201 2,220 vision for income taxes et income $10,739 $8,981 Cisco Systems Inc. Consolidated Balance Sheets n millions, except par value July 30, 2016 July 25, 201!5 ssets assets Cash and cash equivalents Investments $7,631 58,125 $6,877 53,539 Accounts receivable, net of allowance for doubtful accounts of S2495 842 at July 30, 2016 and $302 at July 25, 2015 Inventorie:s Financing receivables, net Other current assets 5,344 1,627 4,491 1,490 73,368 3,332 3,858 24,469 2,376 4,454 1,516 $113,373 1,217 4,272 1.627 78,719 Total current assets and equipment, net 3,506 4,158 26,625 2,501 4,299 1.844 $121.652 Financing receivables, net dwill d intangible assets, net ferred tax assets assets otal assets abilities ent liabilities Short-term debt Accounts payable Income taxes payable Accrued compensation Deferred revenue Other current liabilities $4,160 1,056 517 2,951 10,155 6.072 $3,897 1,104 62 3,049 9,824 47 Total current liabilities 24,911 23,412 21,457 1,876 5,359 1,562 53,666 ng-term debt 24,483 925 6,317 1431 58,067 taxes payable ferred revenue long-term liabilities Total liabilities Sales growth 2017 Sales growth 2018-2020 Terminal growth Net operating profit margin2016 rate rounded to three decimal places Net operating asset turnover 3% 490 190 2016 rate rounded to three decimal places

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