A firm has projected free cash flows of $175,000 for Year 1, $200,000 for Year 2,...

A firm has projected free cash flows of $175,000 for Year 1, $200,000 for Year 2, and 225,000 for Year 3, $250,000 for Year 4, and 300,000 for Year 5. The projected terminal value at the end of Year 5 is $600,000. The firm's Weighted Average cost of Capital (WACC) is 10.5%.

Microsoft® Excel® document to determine the Discounted Cash Flow (DCF) value of the firm based on the information provided above. Show calculations.

Expert Solution

jeff jeffy answered 2 years ago

Firm X has the opportunity to invest $200,000 in a new venture. The projected cash flows...

Firm X has the opportunity to invest $200,000 in a new venture. The projected cash flows from the venture are as follows. Use Appendix A and Appendix B. Year 0 Year 1 Year 2 Year 3 Initial investment $ (200,000 ) Revenues $ 40,000 $ 40,000 $ 40,000 Expenses (25,000 ) (7,000 ) (7,000 ) Return of investment 200,000 Before-tax net cash flow (200,000 ) $ 15,000 $ 33,000 $ 233,000 Firm X uses an 8 percent discount rate, and...

An analyst has the following projected free cash flows for an investment: Year 1: $125,050; Year...

An analyst has the following projected free cash flows for an investment: Year 1: $125,050; Year 2: $137,650; Year 3 to15: $150,000 a year; Year 16 to 20: $200,000 a year. The investment is expected to have a terminal value of $500,000 at the end of Year 20. If the analyst has estimated a present value of $3 millions for the investment, what is the discount rate that she/he has used in calculations. A. % 1.37 B. % 1.78 C....

1.A. A company is projected to generate free cash flows of $800 million per year for...

1.A. A company is projected to generate free cash flows of $800 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 1.5% rate in perpetuity. The company's cost of capital is 12.0%. The company owes $100 million to lenders and has $90 million in cash. If it has 150 million shares outstanding, what is your estimate for its stock price? Round to one decimal place 1.B. A...

Firm ABC’s projected cash flows are as follows Year 1 2 3 4 and 4+ CF...

Firm ABC’s projected cash flows are as follows Year 1 2 3 4 and 4+ CF 3,000 5,000 8,000 Grow at g = 1% forever We can choose one of the following two capital structure plans: Debt Equity Plan A 20% 80% Plan B 50% 50% Plan C 70% 30% The cost of debt are as follows Debt Cost of debt Plan A 20% risk-free rate + 0.5% Plan B 50% risk-free rate + 1% Plan C 70% risk-free rate...

A company is projected to generate free cash flows of $100 million per year for the...

A company is projected to generate free cash flows of $100 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 3.0% rate in perpetuity. The company's cost of capital is 7.0%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place (e.g., $213,456,789 = 213.5).

A company is projected to generate free cash flows of $164 million per year for the...

A company is projected to generate free cash flows of $164 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 2.0% rate in perpetuity. The company's cost of capital is 10.2%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place (e.g., $213,456,789 = 213.5).

A company is projected to generate free cash flows of $47 million per year for the...

A company is projected to generate free cash flows of $47 million per year for the next two years, after which it is projected grow at a steady rate in perpetuity. The company's cost of capital is 11.2%. It has $24 million worth of debt and $6 million of cash. There are 14 million shares outstanding. If the exit multiple for this company's free cash flows (EV/FCFF) is 14, what's your estimate of the company's stock price? Round to one...

Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations...

Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations are shown below. Actual 2016 2017 Projected 2018 2019 Free cash flow $602.40 $663.08 $703.13 $759.38 (millions of dollars) Growth is expected to be constant after 2018, and the weighted average cost of capital is 11.55%. What is the horizon (continuing) value at 2019 if growth from 2018 remains constant? Round your answer to the nearest dollar. Round intermediate calculations to two decimal places.

Company is projected to generate free cash flows of $179 million per year for the next...

Company is projected to generate free cash flows of $179 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 1.8% rate in perpetuity. The company's cost of capital is 10.9%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place

A company is projected to generate free cash flows of $178 million next year and $191...

A company is projected to generate free cash flows of $178 million next year and $191 million at the end of year 2, after which it is projected grow at a steady rate in perpetuity. The company's cost of capital is 13.6%. It has $107 million worth of debt and $77 million of cash. There are 21 million shares outstanding. If the exit multiple for this company's free cash flows (EV/FCFF) is 7.7, what's your estimate of the company's stock...

Question