Question

1.Ogier Incorporated currently has $900 million in sales, which are projected to grow by 8% in Year 1 and by 4% in Year 2. Its operating profitability (OP) is 7%, and its capital requirement (CR) is 65%. Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places.

1. What are the projected sales in Years 1 and 2?

Sales in Year 1:	$ __ million
Sales in Year 2:	$ __ million

2. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2?

NOPAT for Year 1:	$ __ million
NOPAT for Year 2:	$__  million

3. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?

OpCap for Year 1:	$ __ million
OpCap for Year 2:	$  __million

4. What is the projected FCF for Year 2?

$  __million

2. EMC Corporation's current free cash flow of $410,000 and is expected to grow at a constant rate of 4%. The weighted average cost of capital is WACC = 13%. Calculate EMC's estimated value of operations. Do not round intermediate calculations. Round your answer to the nearest dollar.

3. Horizon Value of Free Cash Flows

Current and projected free cash flows for Radell Global Operations are shown below.

	Actual	Projected
	2019	2020	2021	2022
Free cash flow	$605.060	$665.740	$705.787	$748.130
(millions of dollars)

Growth is expected to be constant after 2021, and the weighted average cost of capital is 10.5%. What is the horizon (continuing) value at 2022 if growth from 2021 remains constant? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.

$ __million

4. JenBritt Incorporated had a free cash flow (FCF) of $92 million in 2019. The firm projects FCF of $225 million in 2020 and $500 million in 2021. FCF is expected to grow at a constant rate of 6% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to two decimal places.

$ __ million

Answer 1