A3. Change 1.23% 2015-16 40.50% 2016-17 8% Interest Rate % Change FCF 20.88% Expected FCF - Years Amounts* FCF - 2019 FCF - 2020 1,609.05 FCF - 2018 2,738.70 2,099.22 (1,277.32) Pv* (1,799.74)...

Suppose a potential buyer has offered to buy this company in three years (in 2017). Based on the present value of the company calculated, and being mindful of the need to effectively balance portfolio risk with return, what recommendation should be made about purchasing the company as an investment at that price?

Extracted text: A3. Change 1.23% 2015-16 40.50% 2016-17 8% Interest Rate % Change FCF 20.88% Expected FCF - Years Amounts* FCF - 2019 FCF - 2020 1,609.05 FCF - 2018 2,738.70 2,099.22 (1,277.32) Pv* (1,799.74) (2,535.83) Total Pv* (5,612.89) *In millions Pv=FVN/(1+1)'N PV(IN,0,FV) $ 5,612.89 Future Value of Company * 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.