Solution-What is the terminal value as of year five

What is the terminal value as of year five

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Question - ABC Software is considering starting a new division making phone apps. It has prepared the following - five-year forecast of free cash flows for this division.

	1	2	3	4	5
Free Cash Flows	69,000	20,000	24,000	83,000	215,000

Assume that the cash flows after year 5 will grow at 1% per year, forever. The discount rate for this division is 8%.

Required - What is the terminal value as of year 5 (i.e., the value of all future cash flows starting in year 6)?

Reference no: EM133049972

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What is the terminal value as of year five

Reference no: EM133049972

Reference no: EM133049972

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