b) (2 points) In practice, the most common scenario for a new firm is where the firm grows over time but also is subject to the business cycle fluctuations. Let's start with the firm from Lecture 3 (slides 21-22) for which every other year is a recession ($1,000 cash flows) and every other year is an expansion ($2,000 cash flows). However, now the firm is also subject to the 1% growth, so the cash flows are: Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Cash flow $1,000x1.01=$1,010 $2,000x1.012=$2040.20 $1,000 1.012=$1030.30 $2,000 1.014=$2081.21 $1,000 x1.01"=$1051.01 $2,000 x1.016=$2123.04 $1,000 x1.017=$1072.14 $2,000 x 1.018=$2165.71 and so on forever. The appropriate annual interest rate is 4%. What is the value of the firm now (year 0)