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q1) How do u calculate the Working Capital for each yr ?
q2) Why do u ungear using Thrllall data and then regear using Sleepon?
can u explain abt this thnks in advance
It increases by 3% a year.
They need 50 x 1.03 = 51.50 at time 1.
At time 2 they need an extra 3% x 51.50 = 1.5, so they now have 53.0
At time 3 they need an extra 3% x 53.0 = 1.6, so they now have 54.6
At time 4 they need an extra 3% x 54.6 = 1.6.
At time 5 it is all received as normal.The theme park has different business risk to Sleepon, but the same business risk as Thrillall. So Thrillalls business risk is measure by their asset beta which got by ungearing their equity beta using their gearing.
It is Sleepon doing the investing, so the equity beta applicable to the investment needs the asset beta regearing using Sleepons gearing.
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