02: XYZ Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are not to es

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02 Xyz Enterprises Is Deciding Whether To Expand Its Production Facilities Although Long Term Cash Flows Are Not To Es 1 (20.48 KiB) Viewed 96 times

02: XYZ Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are not to estimate, management has propiedad the folowing confows the first two years. (in milions of dollars Item Year 1 Year 2 Revenues 1700 COGS and operating expenses 80 Depreciation 40 Increase in NWC Capital expenditures 40 Marginal corporate tax rate 40% 999888 a. Calculate the incremental earnings for this project for years 1 and 2 b. Calculate the free cash flows for this project for the first two years c. If the initial investment of the project is 10 thousand dollars and the cost of capital for this project is 15%, what is your estimate of the value of the new project d. If XYZ has a debt of 5 thousand dollars and its number of shares outstanding is 2 thousand shares what is the price of its stock?