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Renewable properties excel - Coggle Diagram
Renewable properties excel
incorporate
terminal value i
f we are not expecting the firm to die off after a certain time
Saito Solar spreadsheet: terminal value formula in TN2
Projection Model
Alternate terminal value analysis
1) Forecast the FCFs for each year (e.g., 2025–2030)
FCF: money coming in and out
calculate the terminal value
--> means you're being asked to estimate how much the business is worth after the explicit forecast period ends
Why? Because forecasting every single year into the far future (like 10, 20, or 35 years) is hard and uncertain, financial analysts usually
Theory
Then calculate a terminal value to capture the value of all future cash flows beyond that period — assuming either: a constant growth rate, or
a multiple based on market comparables.
Method in Saito
1) Use the Gordon Growth Formula to find terminal value
2) discount this terminal value back to present value: because money in the future is worth less than money today
2) Calculate the terminal value
3) Discount all FCFs and the terminal value using WACC
4) Add them up to get the DCF value of the firm
Gordon Growth Model
: most common approach and assumes the company grows at a constant rate forever with the
terminal value
natural fit for
infrastructure projects like solar farms
: Cash flows stabilize after a few years/ Long-term growth is slow and predictable/ There is a finite or stable useful life
Questions:
what needs to change from the previous one you have shown me?
How should the analysis change
Sensitivity analysis
Different Opex growth
Different revenue growth