1. Original Scenario from Milestone 1 - Time Value of Money using 8% Interest Rate 8.00% FCF - 2016 FCF - 2017 FCF - 2015 6,082.00 Amounts* 3,573.00 6,007.00 (5,631.48) (5,150.03) (2,836.36) Pv* Total Pv* *In millions (13,617.88) 2. Change in interest rate and its implications - Lower the Interest Interest Rate to 5% Interest Rate 5.00% FCF - 2016 FCF - 2017 FCF - 2015 3,573.00 Amounts* 6,082.00 6,007.00 (5,792.38) (5.448.53) (3,086.49) Pv* Total Pv* (14,327.40) *In millions 3. Change in interest rate and its implications - Higher Interest Rate (15%) Interest Rate 15.00% FCF - 2016 FCF - 2017 FCF - 2015 Amounts* 6,082.00 6,007.00 3,573.00 (5,288.70) (4,542.16) (2,349.31) Pv* Total Pv* (12,180.16) *In millions

1. Original Scenario from Milestone 1 - Time Value of Money using 8% Interest Rate 8.00% FCF - 2016 FCF - 2017 FCF - 2015 6,082.00 Amounts* 3,573.00 6,007.00 (5,631.48) (5,150.03) (2,836.36) Pv* Total Pv* In millions (13,617.88) 2. Change in interest rate and its implications - Lower the Interest Interest Rate to 5% Interest Rate 5.00% FCF - 2016 FCF - 2017 FCF - 2015 3,573.00 Amounts 6,082.00 6,007.00 (5,792.38) (5.448.53) (3,086.49) Pv* Total Pv* (14,327.40) In millions 3. Change in interest rate and its implications - Higher Interest Rate (15%) Interest Rate 15.00% FCF - 2016 FCF - 2017 FCF - 2015 Amounts 6,082.00 6,007.00 3,573.00 (5,288.70) (4,542.16) (2,349.31) Pv* Total Pv* (12,180.16) *In millions

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 7PROB

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