Mac Industries' free cash flow last year was $ 1million (i.e., FCFo = $1 million). You project the company's free cash flow to grow 20 percent this year (i.e., FCF1 = $1.2 million) and 15 percent next year. After two years its free cash flow is expected to grow at a constant rate of 5 percent. The cost of capital is 12 percent. Calculate value of operations (VOP)
$12.23 million
$16.65 million
$16.91 million
$18.67 million
None of the above