1.) This year Widget Inc. has earnings before interest and taxes of $8 million, depreciation expenses of $1 expenses of $1 million, capital expenditures on $2.5 million, and has increased its net working capital by $500,000. If their tax rate in 35%, what is its free cash flow?

2.) Widget Inc. expects earnings before interest and taxes (EBIT) next year of $2 million. It depreciation and capital expenditures will both be $500,000, and it expects both to stay equal for the next few years. Their working capital will increase by $100,000 over the next year. Its tax rate is 35%. If its WACC is 10% and its FCFs are expected to increase at 4% per year in perpetuity, what is its enterprise value? HINT, the formula can be found on this weeks content section.