Value of operations for free cash flows


Vasudevan Inc. forecasts the free cash flows (in millions) describe below. If the weighted average cost of capital is 13% and the free cash flows are expected to continue growing at the similar rate after Year 3 as from Year 2 to Year 3, what is the Year 0 value of operations, in millions?

Year: 1 2 3

Free cash flow: -$20 $42 $45

a. $586

b. $617

c. $648

d. $680

e. $714 

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Financial Accounting: Value of operations for free cash flows
Reference No:- TGS015797

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