Discounted cash flow Study guides, Class notes & Summaries

This document contains workings, explanations and solutions to the FIN3701 Assignment 1 (QUALITY ANSWERS) Semester 1 2024. For assistance call or us on 0.6.8..8.1.2..0.9.3.4........... QUESTION 1 [10 marks] Kaufold Ltd, a large manufacturer of aircraft components, has a capital budget of R2 000 000 and is evaluating the replacement of its existing machine with a more sophisticated model. The CFO determined the initial investment required and the terminal cash flow associated with the replacemen...

of the Free Cash Flows, you determine the company's Terminal Value, using either the Multiples Method or the Gordon Growth Method, and then you discount that back to its Net Present Value using the Discount Rate. Finally, you add the two together to determine the company's Enterprise Value." Walk me through how you get from Revenue to Free Cash Flow in the projections. - answerFirst, confirm that they are asking for Unlevered Free Cash Flow (Free Cash Flow to Firm). If so: Subtract COG...

Why do you build a DCF analysis to value a company? You build a DCF analysis because a company is worth the Present Value of its expected future cash flows. In a DCF, you divide the valuation into two periods. During the forecast period, assumptions change while in the terminal period assumptions stay the same. You then project the cash flows and bring both the FCF and terminal value back to present value by discounting them, usually by the WACC. Walk me though a Discounted Cash Flow Analysis...

Discounted Cash Flow Analysis Exam Wallstreet prep Questions and Answers 2024

Bloomberg ESG Certification - Introduction to ESG and Sustainable Finance Questions and Answers 100% Solved Why do traditional valuation models, like discounted cash flow, fail at capturing the full range of risks companies face today? Choose one. A. They do not consider compliance risk. B. They offer limited, deterministic and potentially misleading insights. C. They are outdated. D. They do not consider reputational risk. ️️B. They offer limited, deterministic and potenti...

What's the basic concept behind a Discounted Cash Flow analysis? The concept is that you value a company based on the present value of its Free Cash Flows far into the future. You divide the future into a "near future" period of 5-10 years and then calculate, project, discount, and add up those Free Cash Flows; and then there's also a "far future" period for everything beyond that, which you can't estimate as precisely, but which you can approximate using different approaches. Y...

Discounted Cash Flow Valuation Answered (79 Q&As) Latest 1. You are considering two projects with the following cash flows: Which of the following statements are true concerning these two projects? I. Both projects have the same future value at the end of year 4, given a positive rate of return. II. Both projects have the same future value given a zero rate of return. III. Project X has a higher present value than Project Y, given a positive discount rate. IV. Project Y has a higher pres...

Discounted Cash Flow Analysis Exam Wallstreet prep Questions and Answers 2024

Discounted Cash Flow Valuation Answered Latest. 1. You are considering two projects with the following cash flows: Which of the following statements are true concerning these two projects? I. Both projects have the same future value at the end of year 4, given a positive rate of return. II. Both projects have the same future value given a zero rate of return. III. Project X has a higher present value than Project Y, given a positive discount rate. IV. Project Y has a higher present valu...

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