Requtired
1. Use the basic data in the case to put together an analysis similar to Table 1 below. To determine earnings before depreciation and taxs (EBDT), subtract projected operating expenses from projected sales. Use a tax rate of 34 parcent
2. Determine the appropriate discount rate for the firm.
3. Make a decision on whether the project is feasible, based on net present value analysis.
4. What is the drawback to using a six-year time horizon for the project?
5. Extra Question: Find the horizon valua at the end of year 6 ( 1999 ) of all the free cash flows in 2000 and beyone, discount back to year 0 ( 1993 ). Using the long term growth rate ( g )is 10%, and the answer no. 2 is discount rate ( k ).