a) What is the sum of the PV of the predicted adjusted cash flow from asset in 2019, 2020, and 2021?

b) What is the predicted cash flow from asset in 2022?

In 2018, MC Inc. has an EBIT of $125M, and $15M of depreciation. The tax rate is 40%. The net capital spending is $20M. The net working capital is $20M in 2018, and $40M in 2017. The predicted growth rate is 10% in the next three years. Starting in the fourth year, the growth rate will be 5% indefinitely. The firm has $400M (market value) in debt, and 100M shares outstanding. Beta of MC Inc. is 1.5. Market risk premium is 7%. Risk free rate is 5%. The WACC of the firm is 10%