Problem on Financial Forecasting and Free Cash Flow Method of Valuation

Kaplan Ltd. has the following actual financial statements as on 31 st March 2017:
INCOME STATEMENT Rs-million
Revenues 5,000
Raw Materials 3,000
Employee cost 450
Overheads 600
Depreciation 100
COGS 4,150
Interest 50
EBT 800
Tax @ 30% 240
EAT 560
Dividend -
BALANCE SHEET
Fixed assets 1,000
Current assets 750
Total assets 1,750
Equity share capital 135
Reserves & surplus 560
8% debenture 625
Current liability 430
Total liabilities 1,750

The debenture is repayable in 5 equal instalments from 2017-18.

While forecasting the financial statements from 2018 to 2014 you can consider the
following:
1. The cost structure can remain the same.
2. The revenue growth Y0Y would be 5%, but in years 2020 and 2023, there would be
3% rise in the selling price.
3. The company follows SLM for depreciation calculation but due to increasing
additional capacity, the depreciation will be Rs. 120 million in year 2020 and Rs.150
million in the year 2022.
4. The company would be in 30% tax bracket throughout.
5. After the forecast period, a stable growth rate of 3% is considered to be realistic.