Assume that I have been asked to place a value on the ownership position in Apple Hospital.

Its projected profit and loss statements and retention requirements are shown below (in millions):

Year 1 Year 2 Year 3 Year 4 Year 5

Net revenues $225.0 $240.0 $250.0 $260.0 $275.0

Cash expenses $200.0 $205.0 $210.0 $215.0 $225.0

Depreciation $11.0 $12.0 $13.0 $14.0 $15.0

Earnings before interest and taxes $14.0 $23.0 $27.0 $31.0 $35.0

Interest $8.0 $9.0 $9.0 $10.0 $10.0

Earnings before taxes $6.0 $14.0 $18.0 $21.0 $25.0

Taxes (40 percent) $2.4 $5.6 $7.2 $8.4 $10.0

Net profit $3.6 $8.4 $10.8 $12.6 $15.0

Estimated retentions $10.0 $10.0 $10.0 $10.0 $10.0

Apple's cost of equity is 16 percent, its cost of debt is 10 percent, and its optimal capitalstructure is 40 percent debt and 60 percent equity.

The best estimate for Apple's long-termgrowth rate is 4 percent. Furthermore, the hospital currently has $80 million in debt outstanding.

a. I need the equity value of the hospital using the free operating cash flow (FOCF) method. Please show work

b. Suppose that the expected long-term growth rate was 6 percent. I need the impact that would thischange have on the equity value of the business according to the FOCF method. I need the value if thegrowth rate were only 2 percent. Please show work.

c. I need the equity value of the hospital using the free cash flow to equityholders (FCFE) method. Please show work.

d. Suppose that the expected long-term growth rate was 6 percent. I need the impact would that thischange have on the equity value of the business according to the FCFE method. I need the value if thegrowth rate were only 2 percent. Please show work.