Corporate Finance Lab 2

Assignment 1I

Corporate Finance II

19#1)!From!table!19.2!on!page!643!in!the!textbook!we!get!the!following! EBITDA/Sales!ratios:! ! Oakley!! Luxottica! ! Nike! ! Sporting!goods!industry! 17%! ! 18.5%!! ! 15.9%!! 12.1%! ! To!get!the!EBITDA!for!each!company!but!with!Ideko’s!sales!figures,!$75!Million,! we!just!multiply!it!with!the!ratio.! ! ! ! ! The!range!of!EBITDA’s!for!Ideko,!with!current!sales!of!$75!Million,!is!between!the! industry’s!of!$9.075!Million!and!Luxottica’s!of!$13.875!Million.! ! 19#2)&& ! ! ! ! ! ! ! 2005! 2006! 2007! 2008! 2009! 1.)Market! 10,000! 10,500! 11,025! 12,155! 12,155! Size! 2)Market! 10%! 10,5%! 11%! 11,5%! 12%! Share! 3)Production! 1000! 11025,5! 1212,75! 1331,24! 1458! volume(1x2)! ! Answer:&An!expansion!will!become!necessary!2010,!then!capacity!has!exceeded! 50%!the!current!capacity.! ! 19#3)!Since!the!expansion!becomes!necessary!first!in!2010!the!loan!will!hold! steady!on!$100!Million!until!2009.!The!interest!payments!will!start!in!2006!with! 6,8%!of!the!outstanding!debt,!namely!$6,800.!It!will!be!kept!on!this!level! throughout!2010.!The!tax!shield!is!based!on!the!tax!rate!of!35%!and!will!be! $2,380!from!2006!and!kept!on!this!level!throughout!2010.! ! In!2010!it!will!increase!with!the!cost!of!the!expansion!with!$15!million,!to!$115! Million,!but!the!interest!payments!and!interest!tax!shield!will!hold!steady! throughout!2010.!! ! 19#4)!To!change!the!figures!in!table!19.7!we!have!used!the!following!equations:! !!Table!19.3! ! !"#!!"#$%&"'(: !"#$%&!!"#$!×!!"#$%&!!ℎ!"#!× !!"#!!"#$%&"'(!!"#!!"# Table&19.3& & Sales&and&marketing:&Sales&x&(Sales&and&marketing&%&of&sales)Table&19.3& & Direct&labor&costs:&Market&size&x&Market&Share&x&Labor/Unit&&Table&19.3& &

2010! 12,763! 12,5%! 1595!

Administrative:&Sales&x&(Administrative&%&of&sales)&&Table&19.3& & Income&tax:&Pretax&income&x&Tax&Rate& & & Year& 2005& 2006& 2007& 2008& & 1.&Sales& 2.&Cost&of&goods& sold& & & & & 75,000& & & 84,341& & & 94,631& & & &

2009& & &

2010&...