8) [6 points. Choose (clearly circle) one of the following two questions to answer. I will nor grade responses to both questions! a) Briefly explain why valuation professionals do not include excess cash in their net operating working capital (NOWC) when calculating free cash flows. b) Many websites and simple calculations write that EV = MVE + BVD-Cash. Briefly explain why you should only subtract excess cash (and not all cash) in this calculation. 9) [10 points. You want to estimate the damages of a bad decision made by management of a company. You look at the stock returns, and you see that after the market digested the decision and information, the stock price declined by 28%. Over this time period, the market (S&P 500) also declined by 6%. Your beta estimate for the company is 1.22. The risk-free rate during this time period was 3.20%, and the market risk premium was 6.10%. For simplicity, let's assume that you are looking at annual data (so, the returns over a full year). The value of the firm before this bad decision was $5.2 billion, and the firm had $1 billion in debt. Calculate the damages