Rocky Mountain Advanced Genome (RMAG) Case Study
The presentation, using the financial analysis from the spreadsheets,
answers the following questions:

Rocky Mountain Advanced Genome Presentation

1.     Please prepare to explain the implications of case Exhibit1 (Jan’s
first task). Based on this exhibit, is terminal value a material
component of firm value?

2.     Drawing on case Exhibit 4 and your own general knowledge,
where would the various estimators be appropriate? (Jan’s
second task).

3.     Regarding the cash-flow forecasts in case Exhibit 5, at what point
in the future would you set the forecast horizon for the
three investments? Why? More generally, what should determine
when you stop forecasting annual cash flows and estimate a
terminal value?

4.     Please estimate other terminal values based on alternative
estimation. approaches. What is the resulting present value of
cash flows under Big Sur’s and RMAG’s outlook?  How significant
was terminal value in creating the difference between the two
present-value estimates?
Outline of analysis needed to solve case questions:
1. Forecast horizon by industry
2. Discuss why we choose which key terminal value estimators
3. Discuss the forecast horizon for the investment
4. Review terminal value estimations
5. Valuate RMAG
6. Discuss decision