I. Time Value of Money A. Using the Final Project Excel Workbook, compute the following time value of money figures:

A. Suppose that a potential buyer has offered to buy your selected company in three years. Your selected company has projected that the free cash flows will increase by 3% annually over the next three years. Based on the initial present value you calculated above in A1, what would be a reasonable amount for the potential buyer to pay for your selected company three years into the future? Enter your answer and justify your reasoning in the Word document. In your written analysis, be sure to substantiate your claims by using appropriate references and citations using proper APA style where required.

B. What are the implications of the change in present value based on risk? In other words, what does the change mean to your selected company, and how would you, as a financial manager, interpret it? Enter your answer and justify your reasoning in the Word document. In your written analysis, be sure to substantiate your claims by using appropriate references and citations using proper APA style where required. C. Based on the present value of your selected company that you calculated, and being mindful of the need to effectively balance portfolio risk with return, what recommendation would you make about purchasing the company as an investment at that price? Enter your answer and justify your reasoning in the Word document. In your written analysis, be sure to substantiate your claims by using appropriate references and citations using proper APA style where required.

Interest Rate5%

FCF - Years 2021 2020 2019

FCF in dollars* $ 1,811,000.00 $(1,642,000.00) $ 2,960,000.00

Pv* $ (1,724,761.90) $ 1,489,342.40 $(2,556,959.29)

Total Pv* $ (2,792,378.79)

*In millions

Interest Rate5%

FCF - Years

FCF in dollars* $ 181,100.00 $ (164,200.00) $ 296,000.00

Pv* $ (172,476.19) $ 148,934.24 $ (255,695.93)

Total Pv* $ (279,237.88)

*In millions

Interest Rate7%Required Rate of Return for Risk Associated With Projected Future Three Year's Free Cash Flows.5%Numbers from Q1

FCF - Years 7% 5%

FCF in dollars* $ 1,811,000.00 $(1,642,000.00) $ 2,960,000.00 $ 1,811,000.00 $ (1,642,000.00) $ 2,960,000.00

Pv* $ (1,692,523.36) $ 1,434,186.39 $(2,416,241.72) $(1,724,761.90) $ 1,489,342.40 $(2,556,959.29)

Total Pv* $ (5,466,957.48)