You have been asked to find the value of BCD Ltd. and have been provided with thefollowing information:
2010 Sales 4,850,000
Cost of goods sold 3,260,000
Selling, general and admin (SG&A) 1,070,000
Depreciation 200,000
Interest 40,000
Other 30,000
Net income before taxes 250,000
Income taxes (@40%) 100,000
Net income 150,000
Other information provided to you is that sales are expected to grow at a rate of 5% in each of the next 3 years, while cost of goods sold is expected to move to 70% of sales beginning in 2011 and remain at that level. However SG&A costs are expected to decrease to 15% of sales. Capital expenditures are expected to be $200,000 in 2012 and 2013. Working capital is expected to grow at a rate equal to the sales growth, from its current level of $5,500,000. Given this information what are the free cash flows for 2011, 2012 and 2013 respectively?
a. $165,325; ($25,509); ($15,884)
b. $221,325; $30,491; $40,116
c. $245,325; $54,491; $64,116
d. $245,325; $343,241; $367,303
e. $245,325; $68,241; $92,303