Which two terms are added together to calculate corporate value?
A) Amount of capital invested
B) The present value of free cash flows from operations within the planning horizon
C) The present value of free cash flows from operations after the planning horizon
D) Actual return

Question

Quizplus · Accepted Answer

The corporate value is calculated by adding the present value of free cash flows from operations within the planning horizon (B) and the present value of free cash flows from operations after the planning horizon (C). These two components account for the value generated by the company both in the short term and in the long term.

Which Two Terms Are Added Together to Calculate Corporate Value