Please solve base on the instructions in the PDF
Forecasted Free Cash Flows price$ 20.00Additional Assumptions variable cost per unit35.0%Equity Capitalization40% fixed cost per year$ 400,000Rf2.00% initial investment$ 2,000,000Rm8.43% salvage value- 0Cost of Debt6% useful life5.00 depreciation exp/yr.$ 400,000 cannibalization$ (100,000) tax rate22.0% Cost of capital Years 012345 Meals40,00060,00080,000100,000120,000 Revenue800,0001,200,0001,600,0002,000,0002,400,000 Cost of Goods Sold280,000420,000560,000700,000840,000 Gross Margin520,000780,0001,040,0001,300,0001,560,000 Operating Expense400,000400,000400,000400,000400,000 Depreciation Exp400,000400,000400,000400,000400,000 Pre-tax Profit (EBIT)(280,000)(20,000)240,000500,000760,000 Taxes61,6004,400(52,800)(110,000)(167,200) After-tax Profit (NOPAT)(218,400)(15,600)187,200390,000592,800 Depreciation Exp400,000400,000400,000400,000400,000 Operating Cash Flow181,600384,400587,200790,000992,800 Cannibalization(100,000)(100,000)(100,000)(100,000)(100,000) Net Working Capital(100,000)(50,000)(75,000)(75,000)(75,000)375,000 Investment - Plant and Equip(2,000,000) Opportunity Cost - land(456,000) Free Cash Flows(2,556,000)31,600209,400412,200615,0001,267,800 Salvage / Terminal value 6,000,000 FCF & Salvage or Terminal Value(2,556,000)31,600209,400412,200615,0007,267,800 (2,556,000)31,600209,400412,200615,0007,267,800 Net Present Value (Enterprise Value)5,980,000 Land Opportunity Cost Sales Price500,000 BV300,000 Gain/(Loss)200,000 Tax Effect (22%)(44,000) Net CF456,000 Working Capital100,000150,000225,000300,000375,000450,000 (50,000)(75,000)(75,000)(75,000)(75,000) Comparables #Company NameLast PriceShares OutstandingMarket CapitalizationLTM Net Debt Total Enterprise ValueLTM Revenue LTM EBITDA LTM EPS 1 2 3 4 5 MeanERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! MedianERROR:#NUM!ERROR:#NUM!ERROR:#NUM!ERROR:#NUM!ERROR:#NUM!ERROR:#NUM! #Company NameEV / RevenueEV / EBITDAPrice / EPSEBITDA MarginBetaUnlev. Beta 1ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! 2ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! 3ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! 4 5 MeanERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! MedianERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#NUM!ERROR:#DIV/0! UMN 6230 Content Fall 2021 Restaurant with WACC 1 Restaurant Problem Continued (1/1) • Using the prior solution for the restaurant case you need to update your assumption on the cost of capital using a market rate vs. the rate simply provided to you historically • You have been provided assumptions on the risk-free rate, the market return and some basic capital structure assumptions • However, given your company is private – you will need to pull together some comparables to help identify the appropriate cost of capital • Please select five comparables to your restaurant company and complete the comparables tab in the spreadsheet – You will need to research your comparables data from available sources from the Carlson Library, Yahoo Finance, etc. – Your comparables should make be reasonable and related to your project • Compute your cost of capital and finalize your Enterprise Value