CASH FLOW ANALYSIS: (Wavell Corporation)

YEAR 1 2 3 4
EBIT 650,000 650,000 650,000 650,000
LESS: INTEREST 252,000 213,968 170,572 121,051
EBT 398,000 436,032 479,428 528,949
LESS:TAX@40% 159,200 174,413 191,771 211,580
NET INCOME 238,800 261,619 287,657 317,369
DEPRECIATION 119,976 119,976 119,976 119,976
CASH FLOW 358,776 381,595 407,632 437,345
PRINCIPAL REPAID 272,422 310,454 353,850 403,371
CASH FLOW CUSHION 86,354 71,141 53,782 33,974
EQUITY 200,000 438,800 700,419 988,076 1,305,445
DEBT 1,800,000 1,527,578 1,217,124 863,274 459,903
TOTAL ASSETS 2,000,000 1,966,378 1,917,543 1,851,350 1,765,348

% OF DEBT

TOTAL % OF RETURN 8.28367

1.526316
0.526316

payment to ins 537824

total equity 1656734
Firm/ Mnagement 1118910

NOTE
Mgmt
bv 100000
ev 1118910

% Return for the management 11.1891

1.62091048319002
0.620910483190018
 5
650,000
64,519
585,481
234,192
351,289
119,976
471,264
459,903
11,361
1,656,734
0
1656734
Estimated Equity Returns from Acquisition of PGM
LBO Method ( Levered)
Panel a:
Projected Net Income and Equity Free Cash Flow
Year 0 1 2 3 4 5
EBITDA 100 110 121 133.1 146.41 161.05
less: Depricaiation 40 45 50 55 60 65

EBIT 65 71 78.1 86.41 96.05

Interest 52.05 52.06 50.34 47.11 42.14

EBT 12.95 18.94 27.76 39.3 53.91

taxes @ 35% 4.5325 6.629 9.716 13.755 18.8685

Net Income 8.4175 12.311 18.044 25.545 35.0415

Calculation of EFCF