Questions

COMM_V 298 101 102 103 2025W1 Class 19 Practice Quiz

Multiple fill-in-the-blank

Part 1 of 4: Complete the following Table and Compute the FCF. Year 0 Year 1 to Year 19 (single year, not the sum) Year 20 EBIT [Fill in the blank] [Fill in the blank] [Fill in the blank] D&A [Fill in the blank] [Fill in the blank] [Fill in the blank] CapEx [Fill in the blank] [Fill in the blank] [Fill in the blank] Δ\DeltaNWC [Fill in the blank] [Fill in the blank] [Fill in the blank] FCF [Fill in the blank] [Fill in the blank] [Fill in the blank] Round to the nearest dollar. Input your answer without dollar signs or commas, that is, $98,000 must be input as 98000 Enter zero, do not leave blank. Use a minus for outflows.

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Question restatement and mapping to blanks: - The task is to complete the table for Year 0, Years 1–19 (per year, single year), and Year 20 across the following line items: EBIT, D&A, CapEx, ΔNWC, and FCF. - The given answer set corresponds to each blank in the order they appear in the table, resulting in the following assigned values: - EBIT: Year 0 = 0, Years 1–19 = 16850, Year 20 = 16850 - D&A: Year 0 = 0, Years 1–19 = 4650, Year 20 = 4650 - CapEx: Year 0 = -98000, Years 1–19 = 0, Year 20 = 5000 - ΔNWC: Year 0 = 0, Years 1–19 = 0, Year 20 = 0 - FCF: Year 0 = -98000, Years 1–19 = 21500, Year 20 = 26500 Option-by-option analysis for each blank: - EBIT Year 0 = 0 - Why this makes sense: In many project or valuation problems, Year 0 reflects initial setup rather than operating performance, so EBIT is often 0 at Year 0 because operations haven’t begun yet. - What would be wrong if we chose a nonzero value: Any nonzero Year 0 EBIT would imply immediate operating earnings before tax in the initial year, which is atypical for Year 0 in a project cash-flow table where the startup period precedes actual operations. - EBIT Years 1–19 = 16850 - Why this is plausible: If the project generates steady operating income in each year from year 1 through year 19, an EBIT of 16850 per year is a straightforward constant figure. This aligns with a simple scenario where revenue and costs yield a stable operating profit before interest and taxes. - What would be wrong if this value were different: A varying or inconsistent EBIT across those years woul......Login to view full explanation

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