Financial statements

Construct the relevant aspects of financial statements for the following firm:

• Its operations last for 5 years.

• It has capital expenses of $100 for three years.

• It follows two-year linear depreciation.

• It has revenues that start at $100 in the first year and grow by 30% each year.

• It is purely equity financed.

• It’s corporate income tax rate is 40%.

• Customers always pay the year after they have received the product.

What is the firm’s NPV if the CoC is 15% per year?

What is the same (a) firm’s and (b) equity’s NPV if it borrows $200, pays $20 in interest every year, and pays back the $200 principal in the final year?