Sampa Video Solution

Summary Financial Information FY 2000 in $ '000s Sales 22500 EBITDA 2500 Depreciation 1100 Operating Profit 1400 Net Income 660 Terminal Value Growth 5.00% Initial outlay 1500

Additional Assumptions Risk free rate Proj. cost of debt Market Risk Premium Marginal Corporate Tax Rate Proj. Debt Beta Asset Beta for Kramer.com Expected Asset Return

5.00% 6.80% using CAPM 7.20% 40.00% 0.25 1.50 15.80% using CAPM

Projections for Home Delivery Project 2002E 2003E 2004E 2005E 2006E Sales 1200 2400 3900 5600 7500 EBITDA 180 360 585 840 1125 Depreciation -200 -225 -250 -275 -300 EBIT -20 135 335 565 825 Tax Expenses 8 -54 -134 -226 -330 Net Income -12 81 201 339 495 CAPX Investment in W/C Scenario 1 Free Cash Flows EBIAT Depreciation CAPX Change in W/C Free Cash Flows Terminal Value 300 0 All equity finance 1 -12 200 300 0 -112 @cost of asset -96.72 4.47 97.24 174.62 300 0 300 0 300 0 300 0

2 81 225 300 0 6

3 201 250 300 0 151

4 339 275 300 0 314

5 495 300 300 0 495 4812.5 237.72 2311.15

Present Value of FCF Present Value of TV Value of the Firm Scenario 2 Debt Financing of

2728.49 Constant Debt Amount 750,000

1,228,485

Value of Interest Tax Shield Value of Firm Scenario 3 Debt Financing of

300,000 1,528,485

Constant Capital Structure 25% 1.92 18.80% 15.12% -112 @WACC 6 151 314 495 5135.87

Here, Beta of Equity would be Re WACC Free Cash Flows Terminal Value

Total Cash Flow Present Value of FCF Present Value of TV Value of the Firm

-112 -97.29

6 4.53

151 98.97

314 178.78

5630.87 244.82 2540.15

2969.97

End of Year Balances '000s) Value of the Firm Value of Debt Value of Equity $3,531 $883 $2,648 $4,059 $1,015 $3,044 $4,522 $1,130 $3,391 $4,891 $1,223 $3,668 $5,136 $1,284 $3,852