A financial analyst has produced the following free cash flow forecast for the MBA Corporation:

Year

Free Cash Flow $($FCF$)$

$1$

$-$ $$180,000$

$2$

$-$ $$190,000$

$3$

$-$ $$99,000$

$4$

$$50,000$

$5$

$$75,000$

After year $5,$ the analyst estimates the FCFs will become stable and grow at $5$ percent per year thereafter. The firm uses a $15$ percent WACC to evaluate projects with a similar risk.

What is your estimation of terminal value?

$$78,750$

$$125,750$

$$356,741$

$$787,500$

$$862,500$