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?
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.
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.