In the case, it is assumed, that selling CoalCo will result in an increase in Free Cash Flow of 2.695 Billion. Why are the revenues generated through selling the power from CoalCo not considered in this calculation?
My intention was to calculte Operative Cashflow first: (Revenues of CoalCo - Operation Costs of CoalCo. Therefrom, it could be followed how much cash the company generates or bruns on a yearly bases through operating CoalCo).
Subsequently, I would have used this number to calculate the present value of the cashflows associated with operating CoalCo.
Hey Ian, here is my thought process, still focused towards getting the most possible cash. The Revenue is also cash that we would lose, no? So in that sense, we could be effectively reducing operating cash flow by selling CoalCo, since it is profitable and maybe the highest absolute cash generator. Unless we are given any hint on whether there is an idle capacity that could be used to still sell those Ghw, divesting would imply giving away the cash from revenues. This is not considered, why?
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