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Valuations Homework. Brian Gitschier. 1. a). 1. b). 1. c). Higher expense early in GAAP model Higher NEA in capitalization model Higher RNEA and REI in capitalization model early on (reverses). 1. d). GAAP Capitalization. 1. e) - GAAP. 1. e) - Capitalization. 1. f).
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Valuations Homework Brian Gitschier
1. c) • Higher expense early in GAAP model • Higher NEA in capitalization model • Higher RNEA and REI in capitalization model early on (reverses)
1. d) • GAAP • Capitalization
1. f) • Would not have reached stable state • Same sales and other expenses • Different R&D expense and NEA
2. b) • Lower Depreciation expense in 5-year model • Same sales and other expense • Higher Earnings in 2017
2. d) • Same sales • Same non-depreciation expenses • Depreciation will eventually even out • Same intrinsic value
2. e) • Stable PPE investment after 2018 • Same depreciation expense in both models • Same sales and expenses • Same EPAT