c) Florence Ltd has decided to start a new business project, expecting annual cashflows of 6,000 per annum to be generated in perpetuity with interest rates expected to remain at 10% indefinitely. The company receives 6,000 at the end of year 1 but a turn of events mean that the company had to revise its expectations. The company forecasts that it will now receive 12,000 per annum in perpetuity. The rate of interest will also change at the end of year 1 to 20% and is expected to remain so in perpetuity. These revised estimates are not expected to change for the foreseeable future. You should assume that all cashflows arise at the end of each year. Required: Calculate the following. (i) Hicks' income number 1 ex ante (ii) Hicks' income number 1 ex post (iii) Hicks' income number 2 ex post version A; You should reconcile this answer with Hicks' income number 1 ex ante (iv) Hicks' income number 2 ex post version B; You should reconcile this answer with Hicks' income number 1 ex ante 13 marks c) Florence Ltd has decided to start a new business project, expecting annual cashflows of 6,000 per annum to be generated in perpetuity with interest rates expected to remain at 10% indefinitely. The company receives 6,000 at the end of year 1 but a turn of events mean that the company had to revise its expectations. The company forecasts that it will now receive 12,000 per annum in perpetuity. The rate of interest will also change at the end of year 1 to 20% and is expected to remain so in perpetuity. These revised estimates are not expected to change for the foreseeable future. You should assume that all cashflows arise at the end of each year. Required: Calculate the following. (i) Hicks' income number 1 ex ante (ii) Hicks' income number 1 ex post (iii) Hicks' income number 2 ex post version A; You should reconcile this answer with Hicks' income number 1 ex ante (iv) Hicks' income number 2 ex post version B; You should reconcile this answer with Hicks' income number 1 ex ante 13 marks