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4 of 5 (3 complete) HW Score: 50%, 2.5 of 5 pts P8-19 (similar to) Question Help Bay Properties is considering starting a commercial real

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4 of 5 (3 complete) HW Score: 50%, 2.5 of 5 pts P8-19 (similar to) Question Help Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year forecast of free cash flows for this division: Year 1 Year 2 Year 3 Year 4 Free cash flow - $129,000 $13,000 $92,000 $231,000 Assume cash flows after year 4 will grow at 2% per year, forever. If the cost of capital for this division is 16%, what is the continuation value in year 4 for cash flows after year 4? What is the value today of this division? What is the continuation value in year 4 for cash flows after year 4? The continuation value is $ 1,683,000. (Round to the nearest dollar) What is the value today of this division? The value today is $ 84,974 (Round to the nearest dollar.) mter your answer in the answer box and then click Check Answer. parts showing Clear A

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