Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE SHOW WORK AND FORMULAS! You are analyzing the value of a potential unicorn your Investment Banker is trying to sell you on. He says

image text in transcribedPLEASE SHOW WORK AND FORMULAS!

You are analyzing the value of a potential unicorn your Investment Banker is trying to sell you on. He says that its worth today is $1 billion. While you are comfortable with the relative accuracy of the near term cash flows, you are interested in figuring out how much he is expecting the unicorn to be worth at the end of year 4. Assume a 15% discount rate. You expect its cash flows over the next 4 years to be as shown below. Year Cash flows -20M -10M OHNM * 0 12M 40M What is this unicorn's future value at the end of year 4? * A). $ 2,064,672 B). $997,064,672 C). $1,475,395,126 D). $1,695,553,239 E). $1,756,892,730 You are analyzing the value of a potential unicorn your Investment Banker is trying to sell you on. He says that its worth today is $1 billion. While you are comfortable with the relative accuracy of the near term cash flows, you are interested in figuring out how much he is expecting the unicorn to be worth at the end of year 4. Assume a 15% discount rate. You expect its cash flows over the next 4 years to be as shown below. Year Cash flows -20M -10M OHNM * 0 12M 40M What is this unicorn's future value at the end of year 4? * A). $ 2,064,672 B). $997,064,672 C). $1,475,395,126 D). $1,695,553,239 E). $1,756,892,730

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions