NPV Math question

Question

Dear PrepLounge member,

I came across this math question and got stuck answering it. Anyone know how to approach this case math problem? Thank you!

Answer 1

Hi, I would probably do it this way:

Calculate the total profit for Y1
Calculate the total profit for Y18
Calculate the terminal value FCF * (1+g) / (d-g) separate for each component (# of viewers and profit/viewer) - I get a total of 40.6 Billion

I'm not sure if you need to also add the cash flows between years 1 and 18, in that case of have to convert them in Y18 and add them up to the terminal value TV.

Answer 2

Just please realize no one will ask this in a case interview setting. This is not a finance interview, and you are not expected to be using excel.

Answer 3

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