1. INC has provided the following cash flow estimates. The firm assumes that beginning in year 5, cash flows will grow constantly at 5% per year. You require an annual return of 35% on your investment.

Year Cash Flow

1. 0
2. 10,000
3. 50,000
4. 100,000
5. 175,000

What is the terminal value of this firm?

Using the discounted cash flows method, what is the present value of the firm?

Suppose you decide to make an investment of $200,000. What is the post-money valuation of the company? What percent of the company will you own?