Guided Walkthroughs
Full DCF — Step 3 of 12: From EBITDA, get to EBIT and NOPAT for each year. Why does a DCF tax EBIT rather than pre-tax income?
Model answer
D&A = 10% of revenue: 11 / 12 / 13 / 14 / 15 ($M, Y1–Y5). EBIT = EBITDA − D&A: Year 1 33 − 11 = 22; then 24 / 26 / 28 / 30. NOPAT (net operating profit after tax) = EBIT × (1 − 25%): Year 1 22 × 0.75…
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