Attached are Balance Sheets and Income Statements for years 0 and 1 for the Alpine Lemonade Co.

Year 0 is the last historical year and Year 1 is a projection year (pro forma).

a.If the tax rate is 40%, what is Alpine’s Free Cash Flow for year 1?

b. In addition please answer the following questionsQuestion 1 How much is the Net Working Capital in Year 0?        112        132        198Question 2 1 ptsHow much is the Net Working Capital in Year 1?Question 3 1 ptsFrom Year 0 to Year 1, the Net Working Capital increased. Did that have:        A positive impact on cash        A negative impact on cash        No impact on cashQuestion 4 1 ptsThe amount of money spent by Alpine during year 1 to purchase additional Property, Plant & Equipment is equal to:        The total value of its Fixed Assets at the end of Year 1: 415.        The total value of its Net Fixed Assets at the end of Year 1: 305.        The increase in its Fixed Assets from year 0 to year 1: 415 – 360 = 55.        The increase in its Net Fixed Assets from year 0 to year 1: 305 – 280 = 25.Question 5 1 ptsHow much is the Depreciation expense in year 1?        25        30        55Question 6 1 ptsHow much is the Free Cash Flow generated by Alpine in Year 1?Question 7 1 ptsThe future Free Cash Flows of a company will help us value:        Its operating assets        Its non-operating assets        Its equity        Its debt        Its total balance sheetQuestion 8 1 ptsWhat is the right question to ask in order to value the equity of a company?        What are the cash flows the company operations are going to generate?        What is the market value of the non-operating assets the company holds?        What are the cash flows the shareholders of the company are going to receive?Question 9 1 ptsAssume a company plans to have Earnings per share of $10 next year and plans to reinvest 40% of them at an annual rate of 24% in perpetuity.Assume also the discount rate is 10%.How much is the value of equity?        150        300        1500Question 10 1 ptsWhich statement do you agree with?Growth can destroy value when:        The retained earnings are invested at a higher rate than the discount rate.        The retained earnings are invested at a lower rate than the discount rate.        The retention rate is higher than the discount rate.        The retention rate is lower than the discount rate.

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