Moore’s Consulting and Crawfish Shack has a before tax WACC of 14% and an After-tax WACC of 10%. A professional business valuation firm valued this business at $2,800,000. The cash flows to the firm’s assets were assumed to be a constant perpetuity on a going-forward basis and tax laws were assumed not to change.
Compute the annual before-tax and after-tax cash flows that were used in this valuation.