solution

You are attempting to develop a fi ve-year fi nancial planning model for the K.D. Nickel Company. Th e purpose of your planning eff ort is to determine Nickel’s future requirements for external fi nancing andto estimate the aggregate value of the equity. Th e date is the beginning of 2011, and from the exercise in Chapter 2 you have past fi nancial data for the company through fi scal year 2010. Your planning model will use annual periods. Decisions and actions occur at the end of each year. Th e fi rst period in your planning horizon is 2011. Th us, the fi rst year’s sales, expenses, cash fl ows, borrowing, and so on, all occur at the end of 2011, and the second fl ows and decisions occur at the end of 2012.