Comprehensive Forecast

Question 1

Imagine that you are a financial advisor for Netflix, Inc., and Amazon.com, Inc. You are tasked with creating a comprehensive forecast of the revenue, costs, and cash flows of these companies, answering key questions that may influence their future decisions.

Use the Netflix and Amazon Data Spreadsheet to generate a pro forma forecast and consider what this indicates about the future for these two companies.

In a 2-page paper, provide the following:

• A forecast of Netflix, Inc., and Amazon.com, Inc.’s revenue, costs, and estimated cash flows into the next five years.
• The appropriate discount rate for Netflix, Inc., and Amazon.com, Inc.’s forecasted cash flows.
• An appropriate risk-adjusted rate of return for use in evaluating an investment in Netflix, Inc., and Amazon.com, Inc.
• A determination of the estimated fair market value of 100% of Netflix, Inc., and Amazon.com, Inc.’s equity.

Question 2

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link above.

A. You have just won the Lottery jackpot of $11,000,000. You will be paid in 26 equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the payments you will receive?

B. In your own words and using various bond websites, please locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Please describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.