Fullbridge program ipads in china template

iPad Distributor in China – DCF Analysis                                    Assumptions                   Initial Investment      $        10 000 000                                 Income Statement Components                 Projected sales volume 2011                    100 000 units         Sales volume growth rate (2012-2015) 15%             iPad Retail Price      $                     700             Change in retail price per year   -5%             iPad Wholesale Price    $                     500             Change in wholesale price per year   -3%             Initial Gross Margin     29%             Operating Expenses      11% as a percent of sales (note includes depreciation)     Initial Operating Margin   18%                                                     Balance Sheet Components                 Depreciation (% of Cumulative Gross PP&E) 10% assuming a 10 year depreciation schedule     Year 1 Capital Expenditures    $          5 000 000             Growth in Capital Expenditures per year 5%             Net Working Capital     4% as a percent of sales                           Tax rate     35%                                 Discount Rate      11,76%             Perpetuity Growth Rate   3,00%                       Projected           2011 2012 2013 2014 2015 Summary Income Statement                 Sales                    iPad (volume)                        100 000         iPad (price)          $                    700         iPad (revenue)          $      70 000 000         Gross Profit          $      20 000 000         Operating Profit          $      12 300 000         Taxes          $      (4 305 000)         Net Income          $         7 995 000                             Key Balance Sheet Data                 Net working Capital          $         2 800 000                             Cumulative Gross PP&E – Beginning of Year      $                       –           Plus Capital Expenditures        $         5 000 000         Cumulative Gross PP&E – End of Year        $         5 000 000                                       2011 2012 2013 2014 2015 Free Cash Flow                    EBIAT (Operating Profit * (1-Tax Rate))      $         7 995 000         + Depreciation (10% of Cumulative Gross PP&E-EOY)    $            500 000         – Capital Expenditures        $      (5 000 000)         – Change in Net Working Capital        $      (2 800 000)         = Free Cash Flow          $            695 000         Terminal Value (growing perpetuity)                                     Total Free Cash Flows        $            695 000  $                       –    $                       –    $                       –    $                       –                       Discount Rate                   Perpetuity Growth Rate                                     NPV of Future Cash flows                 Less Initial Investment                 Enterprise Value          $