How to do it in EXCEL?

The Math of Discounted Cash Flows

Professor A. Damodaran has arrived at the calculations of the first eleven years of Free Cash Flow to the Firm (FCFF) for a well-known messaging company that recently went public (the data is in $ million). Assume that the cost of capital (WACC) is 9.94% for the first five years, and that it is estimated at 8.00% for Year 10 and beyond; it declines at the same annual rate between Year 10 and Year 6. Horizon is Year 10, and the cash flows are set to grow at 2.47% annually in perpetuity after Year 11. (Note that FCFF in negative during the first five years, as the company has extensive reinvestment needs). Please help Prof. Damodaran with the following calculations:

. Sum of the PV of cash flows Years 1 to 10

. Terminal Value

. PV of Terminal Value

. Total PV of cash flows

1	-335.73
2	-224.93
3	-119.66
4	-91.04
5	-105.03
6	40.44
7	290.87
8	662.61
9	1132.87
10	1623.63
11	1426.29
12	1461.51