Question: Valuation with Negative Free Cash Flows (Medium) At the end of 2008, you forecast the following cash flows for a firm for 20092012 (in millions

Valuation with Negative Free Cash Flows (Medium)

At the end of 2008, you forecast the following cash flows for a firm for 2009–2012

(in millions of dollars):

2009 2010 2011 2012 Cash flow from operations 730 932 1,234 1,592

What difficulties would you have in valuing this firm based on the forecasted cash flows?
What would explain the decreasing free cash flow over the four years?

2009 2010 2011 2012 Cash flow from operations 730 932 1,234 1,592 Cash investments 673 1,023 1,352 1,745

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