A1. Interest Rate 8% FCF - 2015 FCF -2016 FCF -2017 6,082.00 FCF - Years Amounts* 6,007.00 3,573.00 Pv* (5,631.48)(5,150.03) (2,836.36) Total Pv* |(13,617.88) *In millions Pv=FVN/(1+I)^N PV(,N,0,FV) The PV is NOT a negative number. It is a posiive number. This negative values calculated here are a result of the PV formula only A2. Interest Rate 8% FCF - Years Amounts* FCF - 2015 FCF - 2016 FCF - 2017 5,406.30 10% Decrease 3,215.70 5,473.80 (5,068.33) (4,635.03) (2,552.73) Pv* (12,256.09) Total Pv* In millions Pv=FVN/(1+I^N PV(I,N,0,FV) Present Value of Company $12,256.09 *The PV is NOT a negative number. It is a posiive number. This negative values calculated here are a result of the PV formula only
A1. Interest Rate 8% FCF - 2015 FCF -2016 FCF -2017 6,082.00 FCF - Years Amounts* 6,007.00 3,573.00 Pv* (5,631.48)(5,150.03) (2,836.36) Total Pv* |(13,617.88) *In millions Pv=FVN/(1+I)^N PV(,N,0,FV) The PV is NOT a negative number. It is a posiive number. This negative values calculated here are a result of the PV formula only A2. Interest Rate 8% FCF - Years Amounts* FCF - 2015 FCF - 2016 FCF - 2017 5,406.30 10% Decrease 3,215.70 5,473.80 (5,068.33) (4,635.03) (2,552.73) Pv* (12,256.09) Total Pv* In millions Pv=FVN/(1+I^N PV(I,N,0,FV) Present Value of Company $12,256.09 *The PV is NOT a negative number. It is a posiive number. This negative values calculated here are a result of the PV formula only
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Suppose the risk of the company changes based on an unanticipated decrease in the
What are the implications of the change in present value based on risk? In other words, what does the change mean to the company, and how would a
Transcribed Image Text:A1.
Interest Rate
8%
FCF - 2015 FCF -2016 FCF -2017
6,082.00
FCF - Years
Amounts*
6,007.00
3,573.00
Pv*
(5,631.48)(5,150.03) (2,836.36)
Total Pv*
|(13,617.88)
*In millions
Pv=FVN/(1+I)^N
PV(,N,0,FV)
The PV is NOT a negative number. It is a posiive number. This negative values calculated here
are a result of the PV formula only
Transcribed Image Text:A2.
Interest Rate
8%
FCF - Years
Amounts*
FCF - 2015 FCF - 2016 FCF - 2017
5,406.30
10% Decrease
3,215.70
5,473.80
(5,068.33) (4,635.03) (2,552.73)
Pv*
(12,256.09)
Total Pv*
In millions
Pv=FVN/(1+I^N
PV(I,N,0,FV)
Present Value of Company
$12,256.09
*The PV is NOT a negative number. It is a posiive number. This negative values calculated here
are a result of the PV formula only
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