Analyzing data in quantitative study

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This case written assignment is on Arcadian Microarray Technologies, In. (Case 44).

1. Regarding the cash flow forecasts in case Exhibit 5, at what point in the future would you set the forecast horizon for the three investments? Why? More generally, what should determine when you stop forecasting annual cash flows and estimate a terminal value?

2. Estimate other terminal values based on alternate estimation approaches. From these various estimates, please triangulate toward a single composite estimate of terminal value for each of Sierra Capital and Arcadian's forecasts.

What is the resulting present value (PV) of cash flows under Sierra Capital and Arcadian's outlook?

How significant was TV in creating the difference between the two present value estimates?

3. As a general matter in valuation work, how much attention should terminal value garner? What short list of questions about TV could you keep on hand in case a client asked you to opine on a valuation of that company?

Reference no: EM132571133

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