Transcribed Image Text
Create a Free Cash Flow and Discounted Cash Flow Statement. Thetax rate and discount rate are not given, so the percentage belowis an assumption. If there are better assumptions, then feel freeto use that with a description as to why it is better. The EBIT isfrom the company that is trying to bought; their stand alone basisprojected income statement and balance sheet. Show allcalculations. Would you say the merger is a good idea?2015201620172018201920202021EBIT$3,052$3,210$3,470$3,683$3,915$4,118$4,188Tax Rate36%36%36%36%36%36%36%Discount Rate12%12%12%12%12%12%12%Capital Expenditures$2,365$2,070$1,910$1,930$1,930$1,949$1,969Increase in EBIT Pre-merger$0$214$529$844$1,159$1,260$1,260Increase in EBIT Post Merger$0$214$529$968$1,407$1,631$1,755NWC-$192-$128-$134-$140-$146-$151-$154