Question
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 20% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology, and RT's growth rate will slow to 8% per year indefinitely. RT has a 10% weighted average cost of capital. The most recent annual free cash flow (FCF0) was $1.95 million.
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Calculate RT's expected FCFs for t = 1, t = 2, t = 3, t = 4, and t = 5. Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to three decimal places.
FCF1 = $ million
FCF2 = $ million
FCF3 = $ million
FCF4 = $ million
FCF5 = $ million
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What is the horizon value at t = 5 (HV5)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places.
$ million
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What is the present value of the horizon value (HV5)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places.
$ million
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What is the present value of the free cash flows expected at t = 1, t = 2, t = 3, t = 4,and t = 5? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places.
$ million
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What is the value of operations at t = 0? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to two decimal places.
$ million
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