Bay Properties is considering starting a commercial real estate division. It has prepared the followingfour-year forecast of free cash flows for thisdivision:

Free cash flow:

Year 1: -165,000

Year 2: 11,000

Year 3: 89,000

Year 4: 217,000

Assume cash flows after year 4 will grow at 1% peryear, forever. If the cost of capital for this division is 10 %, what is the continuation value in year 4 for cash flows after year 4? What is the value today of thisdivision? What is the continuation value in year 4 for cash flows after year4?