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?
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Fiscal Year
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Capital
Leases
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Operating
Leases
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2015
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$
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113
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$
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893
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2016
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111
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817
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2017
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108
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737
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2018
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101
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638
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2019
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97
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561
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Thereafter through 2097
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880
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4,059
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1,410
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$
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7,705
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Less imputed interest
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726
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Net present value of capital lease obligations
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684
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Less current installments
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36
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Long-term capital lease obligations, excluding current installments
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648
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Interest rate = 8%