Create a Free Cash Flow and Discounted Cash Flow Statement. The tax rate and discount rate...

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Accounting

Create a Free Cash Flow and Discounted Cash Flow Statement. Thetax rate and discount rate are not given, so the percentage belowis an assumption. If there are better assumptions, then feel freeto use that with a description as to why it is better. The EBIT isfrom the company that is trying to bought; their stand alone basisprojected income statement and balance sheet. Show allcalculations.
Would you say the merger is a good idea?
2015 2016 2017 2018 2019 2020 2021
EBIT $3,052 $3,210 $3,470 $3,683 $3,915 $4,118 $4,188
Tax Rate
36% 36% 36% 36% 36% 36% 36%
Discount Rate 12% 12% 12% 12% 12% 12% 12%
Capital Expenditures $2,365 $2,070 $1,910 $1,930 $1,930 $1,949 $1,969
Increase in EBIT Pre-merger $0 $214 $529 $844 $1,159 $1,260 $1,260
Increase in EBIT Post Merger $0 $214 $529 $968 $1,407 $1,631 $1,755
NWC -$192 -$128 -$134 -$140 -$146 -$151 -$154

	2015	2016	2017	2018	2019	2020	2021
Tax Rate	36%	36%	36%	36%	36%	36%	36%
Discount Rate	12%	12%	12%	12%	12%	12%	12%
Capital Expenditures	$2,365	$2,070	$1,910	$1,930	$1,930	$1,949	$1,969
Increase in EBIT Pre-merger	$0	$214	$529	$844	$1,159	$1,260	$1,260
Increase in EBIT Post Merger	$0	$214	$529	$968	$1,407	$1,631	$1,755
NWC	-$192	-$128	-$134	-$140	-$146	-$151	-$154

Answer & Explanation Solved by verified expert

3.6 Ratings (450 Votes)

2015 2016 2017 2018 2019 2020 2021 EBIT 3052 3210 3470 3683 3915 4118 4188 Tax Rate 36 36 36 36 36 36 36 Discount Rate 12 12 12 12 12 12 12 Capital Expenditures 2365 2070 1910 1930 1930 1949 1969 Increase in See Answer

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Transcribed Image Text

Create a Free Cash Flow and Discounted Cash Flow Statement. Thetax rate and discount rate are not given, so the percentage belowis an assumption. If there are better assumptions, then feel freeto use that with a description as to why it is better. The EBIT isfrom the company that is trying to bought; their stand alone basisprojected income statement and balance sheet. Show allcalculations. Would you say the merger is a good idea?2015201620172018201920202021EBIT$3,052$3,210$3,470$3,683$3,915$4,118$4,188Tax Rate36%36%36%36%36%36%36%Discount Rate12%12%12%12%12%12%12%Capital Expenditures$2,365$2,070$1,910$1,930$1,930$1,949$1,969Increase in EBIT Pre-merger$0$214$529$844$1,159$1,260$1,260Increase in EBIT Post Merger$0$214$529$968$1,407$1,631$1,755NWC-$192-$128-$134-$140-$146-$151-$154

	2015	2016	2017	2018	2019	2020	2021
EBIT	$3,052	$3,210	$3,470	$3,683	$3,915	$4,118	$4,188
Tax Rate	36%	36%	36%	36%	36%	36%	36%
Discount Rate	12%	12%	12%	12%	12%	12%	12%
Capital Expenditures	$2,365	$2,070	$1,910	$1,930	$1,930	$1,949	$1,969
Increase in EBIT Pre-merger	$0	$214	$529	$844	$1,159	$1,260	$1,260
Increase in EBIT Post Merger	$0	$214	$529	$968	$1,407	$1,631	$1,755
NWC	-$192	-$128	-$134	-$140	-$146	-$151	-$154