Ian-the Intern's Decision Tree Example #1
FCF = 100
LRC ex. LC = 105
LC = 0
Since LC=0, then LRC = LRC ex LC + LC = 105.
While LRC = FCF+CSM and since FCF = 100, does it mean csm = 5?
Then how to reconcile with this formula: CSM = -FCF?
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FCF = 100
LRC ex. LC = 105
LC = 0
Since LC=0, then LRC = LRC ex LC + LC = 105.
While LRC = FCF+CSM and since FCF = 100, does it mean csm = 5?
Then how to reconcile with this formula: CSM = -FCF?
Comments
You are mixing up the LRC under PAA and the LRC under GMM.
The LRC under GMM here is 100, while the LRC under PAA is 105.
PPA LRC = LRC ex LC + LC
GMA LRC = FCF + CSM
PAA LRC will not and should not be equal to GMA LRC, except through random happenstance