Question
Given the cash flows for Company below, calculate the Present Value of the Business (total value of the firm) when r = 10% and g
Given the cash flows for Company below, calculate the Present Value of the Business (total value of the firm) when r = 10% and g = 5%. Assume horizon value is at year=7.
| Company XYZ |
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| yr 1 | yr 2 | yr 3 | yr 4 | yr 5 | yr 6 | yr 7 | yr 8 |
| Free Cash Flow (FCF) | 0.5 | 0.6 | 0.8 | 1.1 | 1.3 | 1.5 | 1.8 | 2.00 |
| $24.28 | ||
| $36.00 | ||
| $20.32 | ||
| $30.00 | ||
| $16.72 |
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Cost Benefit Analysis
Authors: Harry F. Campbell, Richard P.C. Brown
3rd Edition
1032320753, 9781032320755
