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In: Finance
Following is the seven-year forecast for a new venture called Johnson Transformers: (all amounts in $000)...
Following is the seven-year forecast for a new venture called Johnson Transformers:
(all amounts in $000)
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
| EBIT | $(1000) | $(900) | $200 | $1,200 | $2,500 | $3000 | $3,050 |
| Capital Expenditures | $550 | $350 | $200 | $175 | $175 | $160 | $150 |
| Changes in Working Capital | $400 | $300 | $200 | $100 | $100 | ($100) | ($100) |
| Depreciation | $40 | $80 | $125 | $150 | $150 | $150 | $150 |
Beginning after year 2026 the annual growth in EBIT is expected to be 1.5%, a rate that is projected to be constant over Johnson Transformers remaining life as an enterprise. Beginning in 2026 Johnson's Transformers capital expenditures and depreciation are expected to offset each other (capex - depreciation = 0) and year to year changes in working capital are expected to be zero (working capital levels remain constant year over year). For discounting purposes consider 2020 as year 1. Assume a tax rate is 21% and a cost of capital of 7.75%
Determine the NPV of Johnson Transformers Free Cash Flow for the years 2020 -2026. HINT: Remember to account for loss carry-forwards when determining income taxes.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Johnson Transformers Inc. Following is the seven-year forecast for a new venture called Johnson Transformers: (all...
Johnson Transformers Inc.
Following is the seven-year forecast for a new venture called
Johnson Transformers: (all amounts in $000)
2020
2021
2022
2023
2024
2025
2026
EBIT
$(1000)
$(900)
$200
$1,200
$2,500
$3000
$3,050
Capital Expenditures
$550
$350
$200
$175
$175
$160
$150
Changes in Working Capital
$400
$300
$200
$100
$100
($100)
($100)
Depreciation
$40
$80
$125
$150
$150
$150
$150
Beginning after year 2026 the annual growth in EBIT is expected
to be 1.5%, a rate that is...
Part 1 Johnson Transformers Inc. Following is the seven-year forecast for a new venture called Johnson...
Part 1
Johnson Transformers Inc. Following is the seven-year forecast
for a new venture called Johnson Transformers: (all amounts in
$000) 2020 2021 2022 2023 2024 2025 2026 EBIT $(1000) $(900) $200
$1,200 $2,500 $3000 $3,050 Capital Expenditures $550 $350 $200 $175
$175 $160 $150 Changes in Working Capital $400 $300 $200 $100 $100
($100) ($100) Depreciation $40 $80 $125 $150 $150 $150 $150
Beginning after year 2026 the annual growth in EBIT is expected to
be 1.5%, a rate...
JT Inc Following is the seven-year forecast for a new venture called JT Inc: (all amounts...
JT Inc
Following is the seven-year forecast for a new venture called JT
Inc: (all amounts in $000)
2020
2021
2022
2023
2024
2025
2026
EBIT
$(1000)
$(900)
$200
$1,200
$2,500
$3000
$3,050
Capital Expenditures
$550
$350
$200
$175
$175
$160
$150
Changes in Working Capital
$400
$300
$200
$100
$100
($100)
($100)
Depreciation
$40
$80
$125
$150
$150
$150
$150
Beginning after year 2026 the annual growth in EBIT is expected
to be 1.5%, a rate that is projected...
LG Following is the seven-year forecast for LG: (all amounts in $000) 2020 2021 2022 2023...
LG
Following is the seven-year forecast for LG: (all amounts in
$000)
2020
2021
2022
2023
2024
2025
2026
EBIT
$(1000)
$(900)
$200
$1,200
$2,500
$3000
$3,050
Capital Expenditures
$550
$350
$200
$175
$175
$160
$150
Changes in Working Capital
$400
$300
$200
$100
$100
($100)
($100)
Depreciation
$40
$80
$125
$150
$150
$150
$150
Beginning after year 2026 the annual growth in EBIT is expected
to be 1.5%, a rate that is projected to be constant over LG
remaining...
Railback Battery Systems Following is the seven-year forecast for a new venture called Railback Battery Systems:...
Railback Battery Systems Following is the seven-year forecast
for a new venture called Railback Battery Systems:
Year
2020
2021
2022
2023
2024
2025
2026
EBIT
($1,000)
($900)
$200
$1,200
$2,500
$3,000
$3,050
Capital
Expenditures
$550
$350
$200
$175
$175
$160
$150
Changes
in Working Capital
$400
$300
$200
$100
$100
($100)
($100)
Depreciation
$40
$80
$125
$150
$150
$150
$150
Part 1:
Beginning after year 2026 the annual growth in EBIT is expected
to be 1.5%, a rate that is...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the end of
the year (all amounts in $000): Cash $16,140 Product Revenues
$112,500 Depreciation Expense 3,210 Mortgage Payable 38,000 Taxes
Payable 1,020 Treasury Stock 650 Buildings 79,000 Salaries 62,800
Land 40,000 Accumulated Depreciation 21,730 Current Portion - Notes
and Mortgage Payable 2,200 Accounts Payable 18,500 Equipment 42,000
Net Accounts Receivable 23,500 Income Tax Expense 3,650 Discounts
on Notes Payable 7,950 Interest Expense 4,000 Inventory 6,400 Notes
Payable 25,650 Costs of Goods Sold...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the
end of the year (all amounts in $000):
Cash
Depreciation Expense
Taxes Payable
$ 16,140
3,210
1,020
Product Revenues
Mortgage Payable
Treasury Stock
$ 112,500
38,000
650
Buildings
Land
Current Portion of Notes and Mortgages Payable
79,000
40,000
2,200
Salaries
Accumulated Depreciation
62,800
21,730
Accounts Payable
Net Accounts Receivable
18,500
23,500
Equipment
Income Tax Expense
Discount on Notes Payable
42,000
3,650
7,950
Interest Expense
Notes Payable
Utilities
4,000
25,650
350
Inventory
Costs...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the end of
the year (all amounts in $000): Cash Depreciation Expense Taxes
Payable $ 16,140 3,210 1,020 Product Revenues Mortgage Payable
Treasury Stock $ 112,500 38,000 650 Buildings Land Current Portion
of Notes and Mortgages Payable 79,000 40,000 2,200 Salaries
Accumulated Depreciation 62,800 21,730 Accounts Payable Net
Accounts Receivable 18,500 23,500 Equipment Income Tax Expense
Discount on Notes Payable 42,000 3,650 7,950 Interest Expense Notes
Payable Utilities 4,000 25,650 350 Inventory Costs...
1) For the following situation, develop a seven-year forecast of net operating income for the St....
1) For the following situation, develop a seven-year forecast of
net operating income for the St. George Apartments, incporating the
following assumptions:
a) Potential gross rent and misc. other income will grow at 2.5%
per annum over the forecast period
b) Vacancies in the market area will remain constant over the
forecast period
c) Operating expenses other than management fees and property
taxes will growt at 2.5% per annum over the forecast period
d) Management fees as a percent of...
Forecast the balance sheet for Lambert Co. using the following projected information ($000). Round all projections...
Forecast the balance sheet for Lambert Co. using the following
projected information ($000). Round all projections to the nearest
thousand dollars.
Sales
$10000
Cash
$500
Accruals
$50
Gross Margin
45%
Inventory Turns (based on COGS)
7.0
Total Asset Turnover
1.25
Current Ratio
2.0
Debt: Equity
1:3
ACP
42 days
Assets
Liabilities
Cash
?
A/P
?
A/R
?
Accruals
?
Inventory
?
C/L
?
C/A
?
Debt
?
Net F/A
?
Equity
?
Total Assets
?
Total L&E
?
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