. Emerson Enterprises, Inc., a nationwide electronics company, is considering purchasing a smaller

regional electronics manufacturer, Midwest Electronics, Inc. Emerson Enterprises analysts

project that the merger will result in incremental free cash flows as follows:

Year	Free Cash Flow (FCF)
t = 1	$4 million
t = 2	$5.5 million
t = 3	$6.75 million
t = 4	$25 million

The Year 4 Free Cash Flow (FCF) listed in the table above includes a horizon value of $15 million. Assume all cash flows occur at the end of the year. The acquisition would be made immediately, if it is undertaken. The applicable Weighted Average Cost of Capital (WACC) for this transaction is 12%. What is the value today of Midwest Electronics, Inc. to Emerson Enterprises?