a. Start at year 0, with a cash flow as stated in the case for the two firms. Project cash- flows with their growth rates up until (and including) year 10 (done in the picture) b. In year 10, additionally calculate the terminal value of each of the firms. The formula is given in the book in chapter 8, in example 8.7. r equals the WACC, and g is the growth rate of cash flows. (done in the picture) c. Once you have projected all cash flows, discount them to a present value of the investment. Do this for both projects. Which one do you prefer? (the present value calculated, please help me to answer: which one do you prefer?)

G | M N H Task 2: a) Bio Tech: Year: Solartech: Growth: 0 1 2 3 4 5 DCF: 6.054% 900,000 954,486 1,012,271 1,073,553 1,138,546 1,207,474 1,280,574 1,358,100 1,440,320 1,527,517 1,619,993 1,718,067 8,597,208 26.04% DCE: 4.351% 1,100,000 1,147,861 1,197,804 1,249,921 1,304,305 1,361,055 1,420,275 1,482,071 1,546,556 1,613,846 1,684,065 1,757,339 9,482,953 22.88% 900,000 757,300 637,226 536,190 451,175 379,638 319,445 268,795 226,176 190,315 160,139 134,748 849,850 6 1,100,000 934,112 793,242 673,615 572,029 485,763 412,507 350,298 297,470 252,610 214,514 182,164 1,207,929 7 8 9 10 b) 11 Terminal V WACC Present Value: c) 5,676,248 7,294,089