forecast 10 year cash flows with given data and assumptions
Using the income statement from the previous exercise, forecast a ten year cash flow using the following assumptions:
- Capital Expenditures of $50,000 per year.
- Leasehold Improvements of $10,000 per year.
- DSO of 75 Days.
- Inventory Turnover of 12 times.
- Accounts Payable of 30 days.
- Depreciation is constant.
- The combined Federal and State Tax Rate is 40%.
- There are no additional financing expenses associated with the transaction.
After you have completed your cash flow forecast, calculate a Net Present Value assuming a discount rate of 15%.
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