Financial Modeling Retake Exam Wallstreet Prep__updated!!

Fully list all the broad steps for calculating the value added by the firm with the adjusted PV method {Ans: 1. Take FCF to the firm and discount at the unlevered cost of equity capital to get the value of the unlevered firm 2. Take the tax shield benefit and discount at the cost of risk free debt to obtain the value of the tax shield 3. Sum the value of the unlevered firm and teh value of the tax shield to get the value of teh fimr 4. Subtract date 0 capital to get the value added by the firm}What is the main advantage of forecasting the inflation rate separately for calculating NPV? {Ans: It assures that we are consistent in how we treat inflation when we apply it to NPV calculations, and include it as a component in the discount rate}If the Unit Sales Scale Factor is 90% what is the maximum date 1 real cost of capital at which the project will be acceptable? Why? {Ans: The Unit Sales scale factor is $652 at 11% because any higher percentage the NPV would be negative and the project would have to be rejected}For which age