Believe it or not, Taylor Swift's The Eras Tour was originally planned for 2019 and was supposed to last two years (i.e., 2020 and 2021). Her management team decided to delay the tour until 2022 because she wanted to release another studio album first. The revised tour would also last two years (i.e., 2023 and 2024) and would generate the same exact cash flows. In other words, the original and the revised cash flows look like this: 

Year         2019 2020 2021. 2022 2023 2024 

Original -FCF0 +FCF1 +FCF2 0. 0 0 

Revised 0 0 0. -FCF0 +FCF1 +FCF2 

Assuming, no change in the cost of capital - how would this delay have affected the NPV of the tour as of 2019?

Answer rating: 100% (QA)

The delay of Taylor Swifts The Eras Tour from 2019 to 2022 would have decreased the Net Present Valu... View the full answer