How was 'DF' calculated?

140 Views Asked by At

Asking formulae to how to calculate variable DF

..I would like to know how 'DF' was calculated as below my screenshot: enter image description here enter image description here

unknow: DF, DFCF

Known: # of Year, Rate=10%, FCF, every year FCF grow 7.32% and FCF/DFCF = DF

Thanks in advance!!

1

There are 1 best solutions below

0
On BEST ANSWER

DF is the discount factor with annual compounding, so you get discount rate of $r=10\% = 0.1$ and DF's are $$ D_k = (1+r)^k, $$ so $D_1 = 1+r = 1.1$ and $D_2 = (1+r)^2 = 1.1^2 = 1.21$, etc.