Al. Interest Rate 8% FCF - 2016 FCF - 2017 FCF - Years Amounts* FCF - 2015 Adjusted 3,573.00 6,082.00 6,007.00 Pv* (2,836.36) (5,150.03) (5,631.48) Total Pv* *In millions (13,617.88) Pv=FVN/(1+1)^N...

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What are the
implications

of the change in present value based on risk (a decrease in FCF by 10%)? In other words,
what does the change mean
to the company, and how would a financial manager interpret it?


Al.<br>Interest Rate<br>8%<br>FCF - 2016 FCF - 2017<br>FCF - Years<br>Amounts*<br>FCF - 2015<br>Adjusted<br>3,573.00<br>6,082.00<br>6,007.00<br>Pv*<br>(2,836.36)<br>(5,150.03)<br>(5,631.48)<br>Total Pv*<br>*In millions<br>(13,617.88)<br>Pv=FVN/(1+1)^N<br>PV(IN,0,FV)<br>$ 13,617.88<br>2014 PV of FCF=<br>* The PV is NOT a negative number. It is a posiive number. This negative values calculated here<br>are a result of the PV formula only.<br>

Extracted text: Al. Interest Rate 8% FCF - 2016 FCF - 2017 FCF - Years Amounts* FCF - 2015 Adjusted 3,573.00 6,082.00 6,007.00 Pv* (2,836.36) (5,150.03) (5,631.48) Total Pv* *In millions (13,617.88) Pv=FVN/(1+1)^N PV(IN,0,FV) $ 13,617.88 2014 PV of FCF= * 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.<br>Interest Rate<br>8%<br>FCF - Years<br>FCF - 2015<br>FCF - 2016 FCF - 2017<br>10% Decrease<br>Amounts*<br>5,473.80<br>5,406.30<br>3,215.70<br>(2,552.73)<br>Py*<br>(5,068.33)<br>(4,635.03)<br>Total Pv*<br>*In millions<br>(12,256.09)<br>PV(I,N,0,FV)<br>Pv-FVN/(1+1)^N<br>S 12,256.09<br>2014 PV of Reduced FCF =<br>* The PV is NOT a negative number. It is a posiive number. This negative values calculated here<br>are a result of the PV formula only.<br>

Extracted text: A2. Interest Rate 8% FCF - Years FCF - 2015 FCF - 2016 FCF - 2017 10% Decrease Amounts* 5,473.80 5,406.30 3,215.70 (2,552.73) Py* (5,068.33) (4,635.03) Total Pv* *In millions (12,256.09) PV(I,N,0,FV) Pv-FVN/(1+1)^N S 12,256.09 2014 PV of Reduced FCF = * 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.

Answered 326 days AfterJun 06, 2022

Answer To: Al. Interest Rate 8% FCF - 2016 FCF - 2017 FCF - Years Amounts* FCF - 2015 Adjusted 3,573.00...

Atul answered on Apr 29 2023
36 Votes
Interpreting the Implications of a 10% Decrease in Free Cash Flows on Present Value: A Financial Manager's Perspective
Comparing Table 1 and Table 2, we can see that a 10% decrease in FCF has led to a lower present value for each year as well as the total present value. The total present value has decreased from $13,617.88 million to $12,256.09 million, indicating a reduction in the company's overall value.
This change could have several implications for the company. For example, it could...
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