The subsidiaries of Perth International remit their earnings and investment proceeds to the Australian parent at the end of each year. The annual weighted average cost of capital or required rate of return of Perth International is 7.99 per cent.

Calculate the current value of the Perth International Co. using its expected cash flows in year-one, year-two and year-three. (enter the whole number with no sign or symbol).

To calculate the current value of Perth International Co. using the expected cash flows for the next three years and the company's weighted average cost of capital (WACC) or required rate of return, we will follow the discounted cash flow (DCF) approach.

The formula to calculate the present value (PV) of each cash flow is:

\[
PV = \frac{CF}{(1 + r)^n}
\]

Where:
- \(CF\) = Cash flow in a particular year
- \(r\) = Required rate of return (WACC)
- \(n\) = Number of years in the future the cash flow occurs

The current value is the sum of the present values of the expected cash flows from year one, year two, and year three.

If you provide the expected cash flows for each of these three years, I can calculate the current value of Perth International Co. for you. 

Do you have those numbers available?

Would you like more details or have any questions? Here are five related questions:
1. What factors influence the weighted average cost of capital (WACC)?
2. How does discounting affect the valuation of future cash flows?
3. What are the components of a discounted cash flow analysis?
4. How would changes in WACC affect the overall company valuation?
5. What are other methods for valuing a company besides DCF?

**Tip**: The accuracy of discounted cash flow valuation greatly depends on the accuracy of the projected cash flows.

The subsidiaries of Perth International remit their earnings and investment proceeds to the Australian parent at the end of each year. The annual weighted average cost of capital or required rate of return of Perth International is 7.99 per cent. Calculate the current value of the Perth International Co. using its expected cash flows in year-one, year-two and year-three. (enter the whole number with no sign or symbol).

Learn how to calculate the current value of Perth International Co. using the discounted cash flow (DCF) method. This problem covers key finance concepts such as Present Value (PV), the formula PV = CF / (1 + r)^n, and how the weighted average cost of capital (WACC) impacts the valuation. Suitable for finance or business students.

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