Question
You are a Corporate Financial Analyst at Nike. Nike is thinking of building a new factory in India. The VP, Finance, has asked you to
You are a Corporate Financial Analyst at Nike. Nike is thinking of building a new factory in India. The VP, Finance, has asked you to create a 6-year NPV model, incorporating Terminal Value.
The Terminal Value formula for a 6-year model is as follows:
TV = ( ( Cash Flow Year 6 ) * ( 1 + Growth Rate) ) / ( Discount Rate - Stable Growth Rate)
In this formula, the Growth Rate in the numerator is based on which of the following?
Group of answer choices
CAGR
India Risk Free Rate or India GDP Growth Rate
None of the above
Refer to the prior Question.
In the TV formula, the Stable Growth Rate in the denominator is based on which of the following?
Group of answer choices
CAGR
India Risk Free Rate or India GDP Growth Rate
None of the above
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