Question

The present value of free cash flows is $15 million and the present value of the horizon value is $100 million. Calculate the present value of the business.

Answer 1

Answer:

$115 million

Explanation:

Calculation for the present value of the business.

Using this formula

Present value=Free cash flow+Horizon value

Where,

Free cash flow =$15 million

Horizon value=$100 million

Let plug in the formula

Present value=$15 million +$100 million

Present value=$115 million

Therefore the Present value of the business will be $115 million