Please complete the exercises in Word or Excel

Please complete the exercises in Word or Excel
1/Boomwichers NV, a Dutch company financed by shareholders’ equity only, decides, during

the course of year n, to finance an investment project worth €200m using shareholders’

equity (50%) and debt (50%). The loan it takes out (€100m) will be paid off in full in

n+5, and the company will pay 5% interest per year over the period. At the end of the

period, you are asked to complete the following simplified table (no further investments

are to be made):

Period n n+1 n+2 n+3 n+4 n+5

Operating inflows 165 200 240 280 320 360

Operating outflows 165 175 180 185 180 190

Operating cash flows

Investments −200

Free cash flows

Flows . . .

. . . to creditors

. . . to shareholders

What do you conclude from the above?

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