Categories: Homework on time

? Second BFD needs to figure out how much to pay for Comfort?In this exercise we are doing the secon

? Second BFD needs to figure out how much to pay for Comfort?In this exercise we are doing the second task. Given we have the go ahead to purchase Southern Comfort, is the offer legit? Based on your projections, what is the maximum you offer? So for the moment ignore strategic intent and consequences thereof.? Objective of the exercise is to convince both yourselves and me that you understand pro-forma before we move on to other issues? Question: Value Comfort by projecting cash flows from 79-88 ? Use Exhibit 6, 7 and 9 only? Assume projections in Exhibit 9 are correct for figuring out Gross profits ? Use Exhibit 6 and 7 to figure out %’s for Sales driven Pro-forma (for e.g.CA/Sales needs to be projected at x% based on 77 and 78) ? Taxes: 49%? Growth rate for Terminal Value of Comfort after 1988: g=1% ? RADR: 14%? Depreciation rate: 5% of Fixed Assets ?

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