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| FIN 660 |
| SVA EXERCISE |
| Given: | ($ '000) |
| Base sales: | $250,000 |
| | Base year | Fade rate | Yr. 10 and after | | Note: Fade rate is the year-to-year reduction in the rate to some steady state rate |
| Sales growth: | 1.15 | 0.01 | 1.05 | | Year 1 = 1.14, year 2 = 1.13, etc. |
| Operating PM | 0.20 | 0.01 | 0.1 |
| Fixed capital inv rate | 0.15 | | | | Note: on a per $ of sales basis |
| WC inv rate | 0.09 | | | | Note: on a per $ of sales basis |
| Cash tax rate | 0.38 |
| COC | 0.11 |
| Market securities | $20,000 |
| Debt | $50,000 |
| # shares outstanding | 5,000,000 |
| | | | | | (all dollars in thousands) |
| | | Year1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | Residual |
| Sales | | $285,000.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Operating Profit | | $54,150.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| NOPAT | | $33,573.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| New Investment | | $5,250.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Add'l WC | | $3,150.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Free cash flow | | $25,173.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| PV to year 10 |
| Pv after year 10 |
| 1. Value years 1-10 |
| 2. Value after year 10 |
| Market securities |
| Total Value |
| Less debt |
| 3. Value of equity |
| 4. Value of equity/share |