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4. Perform a sensitivity analysis by varying the project forecasts as follows:

a. Suppose first year sales will equal 2%-4% of IBM's revenues. b. Suppose the cost of capital is 10%-15%. c. Suppose revenue growth is constant after the first year at a rate of 0%-10 Income Statement All numbers in thousands Revenue Total Revenue Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses Operating Income or Loss Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest and Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income Net Income Preferred Stock And Other Adjustments 12/31/2015 81,741,000 41,057,000 40,684,000 5,247,000 19,748,000 15,689,000 724,000 16,413,000 468,000 15,945,000 2,581,000 162,000 13,364,000 -174,000 13,190,000 12/31/2014 92,793,000 46,386,000 46,407,000 5,437,000 22,438,000 18,532,000 1,938,000 20,470,000 484,000 19,986,000 4,234,000 146,000 15,751,000 -3,729,000 12,022,000 12/31/2013 98,367,000 49,683,000 48,684,000 5,743,000 22,629,000 20,312,000 333,000 20,646,000 402,000 20,244,000 3,363,000 137,000 16,881,000 -398,000 16,483,000 Cash Flow All numbers in thousands Period Ending Net Income Operating Activities, Cash Flows Provided By or Used In Depreciation Adjustments To Net Income Changes in Accounts Receivables Changes In Liabilities Changes In Inventories Changes in Other Operating Activities Total Cash Flow From Operating Activities Investing Activities, Cash Flows Provided By or Used In Capital Expenditures Investments Other Cash flows from Investing Activities Total Cash Flows From Investing Activities Financing Activities, Cash Flows Provided By or Used In Dividends Paid Sale Purchase of Stock Net Borrowings Other Cash Flows from Financing Activities Total Cash Flows From Financing Activities Effect Of Exchange Rate Changes Change In Cash and Cash Equivalents 12/31/2015 12/31/2014 12/31/2013 13,190,000 12,022,000 16,483,000 3,855,000 4,492,000 4,678,000 2,407,000 2,121,000 -1,232,000 812,000 1,270,000 -1,407,000 59,000 -1,111,000 -235,000 133,000 -39,000 -57,000 -3,448,000 -1,886,000 -747,000 17,008,000 16,868,000 17,485,000 -3,579,000 -3,740,000 -3,623,000 -629,000 -923,000 -798,000 -3,952,000 1,662,000 -2,904,000 -8,159,000 -3,001,000 -7,326,000 -4,897,000 -4,265,000 -4,058,000 -4,287,000 -12,970,000 -12,785,000 19,000 1,783,000 6,961,000 -9,166,000 -473,000 -790,000 -15,452,000 -655,000 -2,240,000 -9,883,000 28,000 304,000 Balance Sheet All numbers in thousands Period Ending Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill 12/31/2015 7,686,000 508,000 28,554,000 1,551,000 4,205,000 42,504,000 15,200,000 10,727,000 32,021,000 3,487,000 1,734,000 4,822,000 110,495,000 16,788,000 6,461,000 11,021,000 34,269,000 33,428,000 24,603,000 3,771,000 162,000 12/31/2014 8,476,000 508,000 31,831,000 2,103,000 4,967,000 47,377,000 16,629,000 10,771,000 30,556,000 3,104,000 2,160,000 6,675,000 117,271,000 21,973,000 5,731,000 11,877,000 39,581,000 34,991,000 26,994,000 3,691,000 146,000 12/31/2013 10,716,000 350,000 33,487,000 2,310,000 4,488,000 51,350,000 17,394,000 13,821,000 31,184,000 3,871,000 5,551,000 3,051,000 126,223,000 20,735,000 6,862,000 12,557,000 40,154,000 32,856,000 26,176,000 4,108,000 137,000 Stockholders' Equity Misc. Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets 53,262,000 52,666,000 146,124,000 137,793,000 -155,518,000 -150,715,000 -29,607,000 14,262,000 -21,246,000 -27,875,000 11,868,000 -21,792,000 51,594,000 130,042,000 -137,242,000 -21,602,000 22,792,000 -12,263,000 Step by Step Solution

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There are 3 Steps involved in it To calculate the free cash flow FCF net present value NPV and perform a sensitivity analysis for IBMs proposed project youll need to follow these step... View full answer Get step-by-step solutions from verified subject matter experts Document Format (1 attachment) 300 KBs Excel File