Buff Canyon Enterprise (BCE) is evaluating a project, and your co-worker wants you to double-check his work on the termi

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answerhappygod
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Buff Canyon Enterprise (BCE) is evaluating a project, and your co-worker wants you to double-check his work on the termi

Post by answerhappygod »

Buff Canyon Enterprise (BCE) is evaluating a project, and your
co-worker wants you to double-check his work on the terminal value.
BCE has a discount rate of 12%. The free cash flow in year 6 is
$5,000,000 and the FCF is expected to grow forever at 3% after year
6. What is the present value (in year 0) of the project’s terminal
value? (Hint: Draw out a timeline)
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