Clarkson Lumber Company Valuation - Columbia Business School Finance

This assignment is a corporate finance case study focused on valuing the Clarkson Lumber Company. The assignment requires students to answer multiple-choice and numerical questions related to financial statement analysis, free cash flow projections, and valuation methodologies. Students must c...Read More

Part 1 - Multiple choice questions & numerical questions
Part 1 - Multiple choice questions & numerical questions;
due December 9th.
Here are specific instructions when numerically answering the questions:
 Enter your answer without units or dimensions such as %, Euro, USD, etc...
 Do not enter any commas as thousands separator. One thousand (1,000) should be
entered as 1000.
 Decimals are marked by a Dot and using two decimals. USD 5.34 (five dollars and 34
cents) is entered as 5.34.
 Enter negative numbers such as -345 (without a space).
 Follow in addition the specific instructions given in each questions.
Important Note:
Read the case, the instructions and the questions very thoroughly and cross-check the
assumptions with your calculation before submitting your answer. The questions often base
on / build on each other. To avoid inherited errors, we recommend to answer the question in
the order given and to cross-check your assumptions and answers and raise the questions you
might have in the forum before submitting your answer.
Q1
1.0 point possible (graded)
What is the Value of Non Operating Assets in 1995 Market Value Balance Sheet (in '000
dollars, i.e. enter 74 if the answer is $74,000)? unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q2
1.0 point possible (graded)
What is the Value of Debt in 1995 Market Value Balance Sheet? (Actual debt, not Net
Financial Debt) (in '000 dollars, i.e. enter 74 if the answer is $74,000)
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
For the following Questions Q3-Q16 (except Q5) please assume the Base Scenario as
provided in the Case Study Statement.
Q3
388
619

1.0 point possible (graded)
What is the EBIT for 1996? (in '000 dollars, i.e. enter 74 if the answer is $74,000)
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q4
1.0 point possible (graded)
What is the change in Net Fixed Assets for 1996? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q5
1.0 point possible (graded)
What is the Net Working Capital for 1995? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q6
1.0 point possible (graded)
What is the End of Period Inventory for 1996? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q7
1.0 point possible (graded)
What is the Change of Net Working Capital for 1996? (in '000 dollars, i.e. enter 74 if the
answer is $74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q8
1.0 point possible (graded)
253
440
161
671
332

What is the Free Cash Flow for 1996? (enter -56 or -57 if you calculate -56.23) (in '000
dollars, i.e. enter 74 if the answer is $74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q9
1.0 point possible (graded)
Which is the first year to have a positive Free Cash Flow? (enter 1997 for 1997, 1998 for
1998...) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q10
1.0 point possible (graded)
From which year on does the Free Cash Flow grow at a constant 5% rate?
2000
2001
2002
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q11
1.0 point possible (graded)
What is the Explicit Forecast Period?
1996-1999
1996-2000
1996-2001
1996-2002
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q12
1.0 point possible (graded)
What is the Present Value (for simplicity reasons: calculated end of 1995) of the Free Cash
Flow stream of the Explicit Forecast Period?
(275)
52
1996

(204)
(75)
47
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q13
1.0 point possible (graded)
What is the first cash-flow to determine the Terminal Value (use in the Gordon Growth
Formula, aka Gordon Shapiro Formula)? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q14
1.0 point possible (graded)
What is the Terminal (Residual) Value? (in '000 dollars, i.e. enter 74 if the answer is $74,000)
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q15
1.0 point possible (graded)
What is the Present Value (for simplicity reasons: calculated end of year 1995) of the
Terminal Value as calculated in Question 14? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q16
1.0 point possible (graded)
What is the Equity Value? (in '000 dollars, i.e. enter 74 if the answer is $74,000)
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Additional Scenarios
44
3735
2167
2102

Q17
2.0 points possible (graded)
What would be the Equity Value if the growth of sales had following pattern: +5% in 2000,
0% afterwards (Alternative Scenario 1)? (in '000 dollars, i.e. enter 74 if the answer is
$74,000) unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Q18
2.0 points possible (graded)
What would be the Equity Value if the growth of sales was 5% (Base Scenario), but the
Discount Rate was 10%?(in '000 dollars, i.e. enter 74 if the answer is $74,000)
unanswered
You have used 0 of 1 attempt Some problems have options such as save, reset, hints, or show
answer. These options follow the Submit button.
Progression
18 questions not answered
Score: 0/20 points
Progression
18 questions not answered
Score: 0/20 points
1160
1463