Instructor capstone solution — Harbor DCF

Instructor version. Grade reasoning and live formulas before comparing outputs. Do not award an 80-point pass if a critical failure remains. A decline supported by the stated economics can receive full marks.

Independently calculated checkpoints

{
  "explicit_pv": 1620.0427193415642,
  "terminal": 3420.8224105813338,
  "terminal_pv": 1374.7518046639236,
  "ev": 2994.794524005488,
  "equity": 2544.794524005488,
  "downside_ev": 2043.174154092365
}

The calculations originate in curriculum.finance, independently of Excel formulas. The instructor workbook is a separate linked solution. Reconcile any difference using units, timing, tax convention, source perimeter and rounding; do not overwrite a failing formula with this number.

Solution method and assessment

Forecast five explicit years plus a separate terminal cash-flow year. Keep the WACC illustration distinct from the packet discount rate. Rebuild downside operations with flat sales, 14% margin, 3% CapEx and 10% NWC.

A supported valuation memo must explain normalized UFCF, terminal reinvestment, timing, risk and the bid range.

Inspect the supporting schedules in order: source assumptions, operational or transaction drivers, cash implications, claims allocation, checks and recommendation. Require the learner to explain why an input change moves the answer. Review all five rubric dimensions separately. A nonpositive terminal denominator, double-counted debt, time-zero discount error, or concealed unsupported growth assumption is critical.

The full worked chapter supplies the narrative reasoning. The student packet withholds these completed results. Native Excel/LibreOffice recalculation remains a separate compatibility check from the available formula-engine tests.