A projects annual (operating) cash flows for the next five years are: R1.2 million, R1.4 million, R1.7

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Question:

A project’s annual (operating) cash flows for the next five years are:

R1.2 million, R1.4 million, R1.7 million, R2 million, and R2.5 million. Assuming a discount rate of 12% and a terminal growth rate of 4%.

Required:

What is the terminal value for assessing the cash flows after the fifth year?

What is the total value of the cash flows for the company?

What proportion of the total cash flow value is dependent on the terminal value?

Related Book For answer-question

Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Posted Date: Nov 28, 2023 02:50 AM

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A projects annual (operating) cash flows for the next five years are: R1.2 million, R1.4 million, R1.7

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SOLUTION 1 Terminal value V Cash flow in year 5 1 Terminal ... View the full answer

Fundamentals Of Corporate Finance

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