Time value of money-calculate the present value

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Time Value of Money A. Calculate the following time value of money figures: 1. Calculate the present value of the company based on the given interest rate and expected revenues over time. 2. Suppose the risk of the company changes based on an internal event. Recalculate the present value of the company. 3. Suppose that a potential buyer has offered to buy this company in five years. Based on the present value you calculated above, what would be a reasonable amount for which the company should be sold at that future time? B. What are the implications of the change in present value based on risk? In other words, what does the change mean to the company, and how would you, as a financial manager, interpret it? Be sure to justify your reasoning. C. Based on the future value of the company that you calculated, and being mindful of the need to effectively balance portfolio risk with return, what recommendation would you make about purchasing the company as an investment at that price? Be sure to substantiate your reasoning. Free Cash flows =Fiscal Year Capital Leases Operating Leases (FY 15) Free Cash Flows: FCF 1- FCF 5 in millions 2015- $ 113,000 2016 -111,000 2017 -108,000 2018 -101, 000 2019 -97, 000 at 8%

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Reference no: EM131915205

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