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    BCD Ltd. Case Study: Financial Analysis

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    You have been asked to find the value of BCD Ltd. and have been provided with thefollowing information:

    2010 Sales 4,850,000
    Cost of goods sold 3,260,000
    Selling, general and admin (SG&A) 1,070,000
    Depreciation 200,000
    Interest 40,000
    Other 30,000
    Net income before taxes 250,000
    Income taxes (@40%) 100,000
    Net income 150,000

    Other information provided to you is that sales are expected to grow at a rate of 5% in each of the next 3 years, while cost of goods sold is expected to move to 70% of sales beginning in 2011 and remain at that level. However SG&A costs are expected to decrease to 15% of sales. Capital expenditures are expected to be $200,000 in 2012 and 2013. Working capital is expected to grow at a rate equal to the sales growth, from its current level of $5,500,000. Given this information what are the free cash flows for 2011, 2012 and 2013 respectively?

    a. $165,325; ($25,509); ($15,884)
    b. $221,325; $30,491; $40,116
    c. $245,325; $54,491; $64,116
    d. $245,325; $343,241; $367,303
    e. $245,325; $68,241; $92,303

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    https://brainmass.com/business/finance/bcd-ltd-case-study-financial-analysis-314115

    Solution Preview

    You have been asked to find the value of BCD Ltd. and have been provided with the following information:
    2010
    Sales 4,850,000
    Cost of goods sold 3,260,000
    S, G and A 1,070,000
    Depreciation 200,000
    Interest 40,000
    other 30,000
    Net income before taxes 250,000
    Income taxes 100,000
    Net income 150,000
    Other information provided to you is that sales are expected to grow at a rate of 5% in each of the next 3 years, while cost of goods sold is ...

    Solution Summary

    The financial analysis case study for BCD Ltd. The expert finds the value of BCD Ltd.

    $2.49

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