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Sampa Video, Inc.

Harvard Business School Case #201-094


Case Software XLS-123

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Exhibit 1 Summary Financial Information on Sampa Video, Inc., 2000 (in thousands of dollars)

FY 2000
Sales 22,500
EBITDAa 2,500
Depreciation 1,100
Operating Profit 1,400
Net Income 660

Source: Casewriter estimates.

a
EBITDA is the Earnings Before Interest, Taxes, Depreciation and Amortization.
Exhibit 2 Projections of Incremental Expected Sales and Cash Flows for Home Delivery
Project 2002-2006 (in thousands of dollars).

2002E 2003E 2004E 2005E 2006E


Sales 1,200 2,400 3,900 5,600 7,500

EBITDa 180 360 585 840 1,125


Depreciation (200) (225) (250) (275) (300)
EBIT (20) 135 335 565 825
Tax Expense 8 (54) (134) (226) (330)
EBIATa (12) 81 201 339 495

CAPXb 300 300 300 300 300


Investment in Working Capital 0 0 0 0 0

Source: Casewriter estimates.

a
EBITD is the Earnings Before Interest, Taxes and Depreciation. EBIAT is the Earnings Before Interest and After
Taxes. Taxes calculated assuming no interest expense.
b
Annual capital expenditures of $300,000 were in addition to the initial $1.5 million outlay, and are assumed to
remain constant in perpetuity.

1 2 3 4 5
Exhibit 3 Additonal Assumptions.

Risk-free Rate (Rf) 5.0%


Project Cost of Debt (Rd) 6.8%
Market Risk Premium 7.2%
Marginal Corporate Tax Rate 40%
Project Debt Beta (d) 0.25
Asset Beta for Kramer.com and Cityretrieve.com 1.50

Source: Casewriter estimates.

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