Calculate the present value of the expected free cash flows

Assignment Help Financial Management

Reference no: EM131334728

A financial analyst with MTC International has estimated the annual after-tax free cash flow from a proposed merger to be $1.5 million. This cash flow is expected to continue for 10 years.

For the following 5 years, the free cash flow is estimated to be $0.7 million per year. MTC International feels that the appropriate risk-adjusted discount rate is 16 percent.

Calculate the present value of the expected free cash flows from the proposed merger through year 15.

Reference no: EM131334728

Questions Cloud

How will you change and develop your political skills : How would you rate your political skills, and which political behavior do you use most often?

Characteristics of a monopolistically competition industry : Describe the characteristics of a monopolistically competition industry. Describe why monopolistic- ally competition firms find it important to establish brand loyalty for their product and service? How do try to create brand loyalty? Give Two exa..

Essay about dan walnycky at and t telephone lines went dead : Essay about this topic: Dan Walnycky: (1990) AT&T telephone lines went dead across the country for 9 hours. Include some sort of graphical documentation and a bibliography that lists all sources (online or not).

Discuss economic theory related to the quote : Discuss economic theory related to the quote above. Be sure to include a definition of exports and the way in which exports are counted in the measurement of Gross Domestic Product (GDP) within your discussion.

Calculate the present value of the expected free cash flows : A financial analyst with MTC International has estimated the annual after-tax free cash flow from a proposed merger to be $1.5 million.

Demand for the dollar to increase or decrease relative : Let the exchange rate be defined as the number of dollars per Japanese yen. Assume there is an increase in U.S. interest rates relative to that of Japan. Would this event cause the demand for the dollar to increase or decrease relative to the deman..

Explain the different orientations to international busines : What forces have been driving the increased internationalization of business?- Explain the different orientations to international business that can be found among executives.

Microeconomic nature of firms decisions : Discuss a scenario in which the use of leading indicators for your industry or firm (or an industry or firm of your choosing, could be fictitious or general) might improve performance and promote better decision making.

What are the total benefits from project : a. What are the total benefits from each project? b. If a vote were held for each project, what would be the result for each project? Is this socially optimal? c. If these representatives were to logroll (trade votes) to get their preferred policy to..

User Account

All Pages