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4. Bluechip Inc. is a private, startup company, which expects a Free cash flow of $1,500,000 in Year 1, $800,000 in Year 2, $1,000,000 in

4. Bluechip Inc. is a private, startup company, which expects a Free cash flow of $1,500,000 in Year 1, $800,000 in Year 2, $1,000,000 in Year 3 , and expected to grow at a 5% rate after Year 3 . If the WACC is 20%, what is the terminal value in Year 3 ? What is the current value of operations today? (10 Marks) LUTION 4

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