AMC Data & Assumptions. According to the 5-year business plan for AMC

AMC Data & Assumptions

Use the following data to estimate the value of AMC:

DATA
AMC Balance Sheet
At 12/31/2008 and 12/31/2009
Assets:
Cash	$89, 000	$100, 000
Accounts Receivable	64, 000	70, 000
Inventory	112, 000	100, 000
Prepaid expenses	10, 000	10, 000
Total current assets	275, 000	280, 000
Gross plant and equipment	238, 000	311, 000
Accumulated Depreciation	(40, 000)	(66, 000)
Total assets	$473, 000	$525, 000

Liabilities and Equity
Accounts Payable	$85, 000	$90, 000
Accrued liabilities	68, 000	63, 000
Total current liabilities	153, 000	153, 000
Mortgage Payable	70, 000
Preferred stock		120, 000
Common stock	205, 000	205, 000
Retained earnings	45, 000	47, 000
Total liabilities and equity	$473, 000	$525, 000

AMC Income Statement
For the Year Ended 12/31/2009
Sales (all credit)		$184, 000
Less: cost of goods sold		60, 000
Gross profits		124, 000
Less: operating expenses
General and administrative	44, 000
Depreciation	26, 000
Total		70, 000
Operating income		54, 000
Interest expense		4, 000
Earnings before taxes		50, 000
Taxes		16, 000
Preferred stock dividends		10, 000
Net income available to common stockholders		24, 000

1. The only entry in the accumulated depreciation account is for 2009 depreciation.
2. Common stock dividends for 2009	22, 000

According to the 5-year business plan for AMC

Sales are expected to grow at 4% per annum in the next five years.

EBITDA Margin % is expected to increase slightly to 45% next year and remain at that level for the following 4 years.

Working Capital will stay at 69% of Sales.

Capital Expenditures will be? 25 million p. a. throughout the 5-year period.

Depreciation charges will be equal to Capital Expenditures (i. e. ? million p. a. ).

Finally, the corporate tax rate is expected to stay at the current 35%.

Assume a WACC of 8% & a final 2% growth of FCFF for the Terminal Value