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 XXXXXXXXXXFCF - 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 XXXXXXXXXXFCF - 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.