Company DEF is a listed firm in the health industry. It reported net income of $ 150 million in 2019.It had capital expenditures of $ 65 million and depreciation of $ 30 million in 2019, and its non-cash working capital was $ 500 million(on revenues of $ 10 billion).The firm has a debt ratio of 10%, and plans to maintain this debt ratio. Income, cap ex, depreciation and revenues are all expected to grow 10% in 2020; non-cash working capital as a percent of revenues remains unchanged.

ABC company focuses on publishing textbooks in Financial technology. Over the last five years, CF plc has spent £200,000 every year to hire practitioners and researchers to publish papers in various areas of fintech. The company is considering to expand its business by initiating a training programme. According to the market research, the training programme will attract customers for four years (Year 1-4) with a terminal value of £200,000 at final year. The market research, which has already been conducted by a group of external consultants, costs the company £80,000. It suggests that the training programme is expected to attract 200 customers each year from year 1 to year 3 and 100 customers in year 4. The training programme charges each customer £5,000, which will be paid at the end of each year. The training programme is likely to bring additional sales to ABC company by £150,000 per year from year 1 to year 3, the incremental sales in those products would require £100,000 operating expenses per year. In order to launch the training programme, ABC company will need to purchase a new machine that costs £800,000 this year (year 0). The depreciation is based on the straight-line method and the machine is assumed to have no market value in year 4. The corporate tax rate is 25%. The operating costs is predicted to be 25% of the revenue from this programme. Moreover, ABC company plans to run this training programme using its spare offices, which may be rented out for an annual income of 100,000 in year 0, the rent is expected to increase by 10% each year. For this training programme, working capital is forecasted to be 10 % of revenue of training programme from year 1 to year 3 and is completely recovered when the project ends in year 4.

You are trying to assist your line manager to value a target company. The recent financial statements of your target reported the following (rmb):