Q 2.69. The prevailing discount rate is 15% per annum. Firms live for three years. Firm F's cash flows start with $500 in year 1 and grow at 20% per annum for two years. Firm S's cash flows also start with $500 in year 1 but shrink at 20% per annum for two years. What are the prices of these two firms? Which one is the better "buy"?