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Milestone One: Time Value of Money FCF1 FCF2 FCF3 Amounts Pv $0.00 Total Pv $0.00 $0.00 $0.00 Interest Rate FCF4 FCF5 $0.00 $0.00 Milestone Two:...
This is a case study based on Time Value of Money and the link of the case study is
http://www.sec.gov/Archives/edgar/data/354950/000035495015000008/hd-212015x10xk.htm
Please answer the following questions in detail
A. Calculate the following time value of money figures:1. Calculate the present value of the company based on the given interest rate and expected revenues over time.2. Suppose the risk of the company changes based on an internal event. Recalculate the present value of the company.3. Suppose that a potential buyer has offered to buy this company in five years. Based on the present value you calculated above, what wouldbe a reasonable amount for which the company should be sold at that future time?
B. 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 wouldyou, as a financial manager, interpret it? Be sure to justify your reasoning
.C. Based on the future value of the company that you calculated, and being mindful of the need to effectively balance portfolio risk with return, what recommendation would you make about purchasing the company as an investment at that price? Be sure to substantiate your reasoning.
The pdf has all the required guidelines and the calculations need to be performed on the spreadsheet on sheet number one.
I have calculated the discount rate already and it is 9.74%
- Attachment 1
- Attachment 2