PART II: Firm X is considering performing a considerable investment in year 2020. The value of Firm X (as of the end of

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PART II:
Firm X is considering performing a considerable investment in
year 2020. The value of Firm X (as of the end of 2019) if the
investment is done is estimated at $306,769,521.
Table II.a
Firm Value: Not doing the Expansion
2019
2020
2021
2022
2023
2024
Free Cash Flow of Firm
5,233,648
5,235,964
5,238,839
5,242,190
5,245,946
EBITDA
7,643,182
Interest Tax Shield
60,000
60,000
60,000
60,000
60,000
Assume a discount factor of 10% for the Free Cash Flows and the
Continuation Value, and 10% for the Interest Tax Shield. Assume
that the EBITDA Multiple is 2. What is the Present Value (as of the
end of December 2019) of the Free Cash Flows forecast of Firm X if
the firm where not to do the expansion?"
10 points
QUESTION 17
What is the Present Value (as of the end of December 2019) of
the Continuation Value forecast of Firm X if the firm where not to
do the expansion?
10 points
QUESTION 18
What is the Present Value (as of the end of December 2019) of
the Interest Tax Shield forecast of Firm X if the firm where not to
do the expansion?
10 points
QUESTION 19
What is the Firm Value (as of the end of December 2019) of Firm
X if the firm where not to do the expansion?
10 points
QUESTION 20
"True or False: Firm X should do the expansion (according to the
NPV). Recall the Value of Firm X if the expansion is performed is
estimated to be $306,769,521."
True
False
10 points