Time value of money analysis

I. Time Value of Money A. Calculate the following time value of money figures:

1. Calculate the present value of the company based on the given interest rate and expected revenues over time.

2. Suppose the risk of the company changes based on an internal event. Recalculate the present value of the company.

3. Suppose that a potential buyer has offered to buy this company in five years. Based on the present value you calculated above, what would

be a reasonable amount for which the company should be sold at that future time? B. What are the implications of the change in present value based on risk? In other words, what does the change mean to the company, and how would

you, as a financial manager, interpret it? Be sure to justify your reasoning. C. Based on the future value of the company that you calculated, and being mindful of the need to effectively balance portfolio risk with return, what

recommendation would you make about purchasing the company as an investment at that price? Be sure to substantiate your reasoning. Guidelines for Submission: Your paper must be submitted as a 2- to 3-page Microsoft Word document, not including your calculations, which should be completed in the Final Project Student Workbook. Use double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.


I have completed requirement 1.