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Answered step-by-step
startup cocommenced operations at the beginning of 2020. $125...
startup cocommenced operations at the beginning of 2020. $125 million of equity was raised to
fund the purchase of equipment as well as for general corporate purposes. As part of its business
planning process, a 5-year forecast was developed (Base Case) as well as upside and downside
scenarios (Hi
...[Show More]
Question
Answered step-by-step
startup cocommenced operations at the beginning of 2020. $125...
startup cocommenced operations at the beginning of 2020. $125 million of equity was raised to
fund the purchase of equipment as well as for general corporate purposes. As part of its business
planning process, a 5-year forecast was developed (Base Case) as well as upside and downside
scenarios (High and Low Cases, respectively). At the end of 2020, StartupCo issued $150
million of 5-year debt, repayable in equal annual installments at the end of each year, to finance
its future capital program..
1. Using the high case calculate the change in noncash working capital in 2023e that would
appear on the cash flow statement
-$141
$141
-$1828
$1828
1. Using the low case calculate the interest coverage ratio using EBITDA for 2021e
2.7x
1.9x
0.9x
0.3x
3 . Using the base case calculate the roe in 2022e
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