Cor Fi Rand 2

Front 1

After tax cf

Back 1

(Sales - variable costs - fixed costs *(1-t)) +(dep*tax rate)

Front 2

For capital for economic profit

Add capital investment +

Addl net working capital +

But add the addl net working capital up to prior year

So if 2.2 in 2013 and .5 in 2014 and askes for 2014 only add the 2.2

Back 2

.

Front 3

.for economic income...change in mv is

Back 3

.change pv of future CF

So if asking for year 3 and there are 5 years total...discount the final 3 cf's by the dsicount rate then discount the final 2 by the discount rate and subtract the larger from the smaller ...and subtract that from after tax CF

Front 4

Use eea or least common multiple lives if asked which project and if they are 3yr and 5yr calculate their value for 15 yrs dsicounting (for the 5 yr) to more 5yr values discounted back by ^5 and ^10 and the original npv is the first five

Back 4

.

Front 5

1/PE to get earnings for harmonic mean

And used weight of market cap to tot market cap

And weighted harminic uses 1 in numinator

Back 5

.

Front 6

Solve for marginal tax rate on div

Back 6

1- (Price drop when ex dividend*(1- cap gain tax))

Front 7

Stagger board of directors allow for continuity

Back 7

.

Front 8

If need to adjust cost of capital f they are suggesting to add debt and asking what is new WACC

Cost of capital is .12 now

Back 8

.12+(.12-cost of debt)*(1-tax)*current DE

Then use this as CoE for finding WACC