Consider the following data for ABC enterprises (all numbers in €):

• Today is January 1, 2013

• Income statement for 2012 shows:

i) Revenues for 500,000
ii) Cost of Goods sold: 350,000
iii) General & Administrative Costs 25,000

• Applicable tax rate = 35%

• Investment in working capital for 2013 is expected to amount to 20,000 and capex will be 40,000.

• Depreciation that same year has been estimated at 15,000.

• Evolution of the above magnitudes is expected to be the following:

i) Revenues is expected to grow at a rate of 5% until 2017
ii) Cost of goods sold: 70% of revenues
iii) G&A costs: 5% of revenues
iv) Investment in working capital is expected to grow at a rate of 5% until 2017
v) Both CAPEX and depreciation are expected to follow the same growth rates which are:  4% until 2015 and 2% the two years after that.

With respect to the cost of capital, available data is the following:

• The firm’s balance sheet shows 200,000 in financial debt which bears an interest rate of 5% and 500,000 in equity.

• Industry’s average unlevered beta = 1.13

• Market risk premium = 7%

• Government bond with 20 years´ maturity stands at  3%

Please, forecast cashflows for 2013 – 2017, estimate the Residual Value and perform the corresponding firm valuation.