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1. Heath and Logan Inc. forecasts the free cash flows (in millions) shown below. If the free cash flows are expected to continue growing at

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1. Heath and Logan Inc. forecasts the free cash flows (in millions) shown below. If the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the Year 0 value of operations, in millions? WACC 10% Year Free cash flows 1 -20 2 42 3 44 Long-term constant growth rate in FCF Horizaon Value PV of horizon value PV of FCF Value of operations

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