Completed quickly and followed instructions given. Grammar, spelling, etc. was all good as well. Thank you so much! Will hire in the future.
JTM Airlines, a privately held firm, is looking to buy additional gates at its home airport for $1,500,000. It has money in the bank, but that money may not be spent as it is used to pay salaries, suppliers, and equipment. It asked its bank for a loan, but the bank refused unless the project had a return higher than JTM’s weighed average cost of capital. Separately, PAN Airways’s CEO approached JTM’s CEO to sell the airline. As a result of all this, JTM has contracted you to:
1. Calculate JTM’s weighed average cost of capital (WACC) based on two airlines trading in the capital markets – PDM and GAL. Since JTM does not trade, it has no beta, so you need to use these two firms as proxies. JTM’s CFO kindly gave you the necessary information on PDM and GAL for you to do this.
2. Aside from the purchase price, the gates will require a working capital infusion of $1,500,000 at purchase. JTM estimates the gates will generate cash flows of $295,500 in year 1, inflating at 4%/year over the next 12 years. After that, the gates will revert back to the airport operator. Half the working capital is recovered at the end. Calculate the NPV and IRR of the gates.
3. You were given PAN’s 2020 income statement (IS) and balance sheet (BS), along with forecasts of the revenue growth. Forecast the IS and BS for the next 5 years.
4. The price discussed by the two CEOs is $6.5M. You must value PAN Airways using free cash flows to see if this price is fair or not.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more