Shephard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected...
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Finance
Shephard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that the project will produce the following cash flows for the first two years (in millions).
Year
1
2
Revenues
1200
1400
Operating Expense
450
525
Depreciation
240
280
Increase in Working Capital
60
70
Capital Expenditures
300
350
Marginal Corporate Tax Rate
30%
30%
To facilitate things, you are given the increases in Net Working Capital, not Net Working Capital
(2 points) What is the EBIT for Shephard Industries in year 2?
(2 points) What is the unlevered net income for Shephard Industries in year 2?
(2 points) What is the depreciation tax shield for Shephard Industries in year 2?
(2 points) What is the free cash flow for Shephard Industries in year 2?
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