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Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Assumptions:
Sales Growth % 0 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03
Cost of Sales (COS) as % of Sales 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Sales, General & Admin. Exp. as % of Sales 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Depreciation as % of Sales 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
Amortization as % of Sales 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Interest on Cash & Marketable Securities % 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
Interest on Senior Debt % 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07
Interest on Subordinated Debt % 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09
Tax rate 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Cash & Marketable Securities as % Sales 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Change in Working Capital as % of Sales 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02
Capital Expenditues as % of Sales 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
Problem 13-16 Solution to Part A
