What is the new annual interest rate that would help them achieve the above terminal value

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

Requirements: 1.

Integrated financial statements and Discounted cash flow valuation. a. Forecast annual Income statement b. Forecast annual cash flow statement c. Forecast annual balance sheet d. Perform discounted cash flow valuation, given perpetuity growth rate 2% i. Forecast the free cash flow ii. Calculate the weighted average working capital iii. Calculate the terminal value for the business iv. Calculate the NPV v. Calculate the fair value per share. Notes:

• Create necessary tabs in your Excel file to help the user understand your model

• Ensure that your model does not show errors

2. Create a new tab named “Answers” and provide the answers for questions below: If the owners target £300000000 as terminal value, by changing the interest rate,

a) What is the new annual interest rate that would help them achieve the above terminal value? b) What is the new NPV?

c) What is the new fair value per share?

3. Perform scenario analysis on the income statement and cash flow statement. Estimated vacancy rates for each year Scenarios 1 2 3 4 5 6 Base case 2.00% 1.00% 0.50% 1.50% 3.00% 2.50% Worst case 8.00% 5.00% 2.50% 5.00% 8.00% 6.50% Best Case 0% 0% 0% 0% 0% 0% 7

4. Insert two charts to show the values under the three scenarios; one for annual net income and another for closing cash balance.

5. The business is considering charging tenants for parking on top of the rent. Parking cost/unit is £2000 per year.

a. What would be the effect on the net income?

b. Insert a suitable chart to show the two scenarios (income with parking and income without parking).

6. Ensure that chart titles are automated and updated when scenarios change. Ensure suitability of the chart type and double check if it makes sense.

Attachments:

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