11. Donner Inc. has forecasted that it's free cash flow three years from now, FCF,, will be S20 million. After three years, free cash flow is expected to grow at a constant rate of 3%. The required return on common stock ra is 14.2% and the WACC is 12.73%, what is the present value of Donner's horizon value, V? a. $123.5 million b. $147.8 million c. $167.5 million d. $174.3 million e. none of the above 12. Mistletoe Co. is evaluating the possible acquisition of a new machine to replace a existing machine. The new machine will cost $1,751,000. Freight and installation necessary to put the machine in service will cost $140,000. The firm expects that, due to increased sales, inventory and accounts receivable will increase by S170,000 and S120,000, respectively. Accounts payable are expected to increase by $150,000. The firm thinks that it could sell the existing machine for $180,000. The current book value of the existing machine is $130,000 and the firm's tax rte is 40%. What is the firm's initial outlay for this replacement project? a. $1,845,000 b. $1,860,300 c. $1,871,000 d. $1,905,000 e. $1,916,300