Excel Activity: Free Cash Flow Valuation Model

Start with the partial model in the file Ch$08$ P$25$ Build a Model.xlsx$.$ Selected data for the Derby Corporation are shown here. Use the data to answer the

questions.

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below.

Do not round intermediate calculations.

a$.$ Calculate the estimated horizon value $($i$.$e$.,$ the value of operations at the end of the forecast period immediately after the Year$-4$ free cash flow$).$

Assume growth becomes constant after Year $3.$ Enter your answer in millions. For example, an answer of $$1\mathrm{.}23$ million should be entered as $1\mathrm{.}23,$

not $1,230,000.$ Round your answer to two decimal places.

$

million

b$.$ Calculate the present value of the horizon value, the present value of the free cash flows, and the estimated Year$-0$ value of oderations. Enter vour