Question 1 You Are Considering Buying A Company Using Leveraged Buyout The Company Is Projected To Have Sales Of 300 Mi 1 (96.87 KiB) Viewed 19 times
QUESTION 1 You are considering buying a company using leveraged buyout. The company is projected to have sales of 300 million each year in the three years after buyout. The cost of sales and other administrative expenses are 60% of the sale. Depreciation and amortization are 5% of the sale. Tax rate is 40%. Suppose that the change in net working capital and capital expenditure each year is zero. If you borrow 900 million at interest rate of 6% per year, and you use all the cash flow to repay debt. What is the EBITDA in the first year after the buyout? QUESTION 2 What is the interest expense in the first year after the buyout? 1 points 1 points Save Answer Save Answer
QUESTION 3 What is the net income in the first year after the buyout? QUESTION 4 How much debt can you retire in the first year? (Enter the number in millions.) 1 points 1 points Save Answer Save Answer
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