Freddie Bamboozle Co. is considering a new project to invest in. The project will require an initial investment of $2,400,00 and is expected to generate $1,200,000 cash flows consistently for three years. What is the NPV for this project if the cost of capital is 15%. Show your workings.

Fabulous Pumplin Corporation plans to pay $3.50 per share dividend next year. The company promises to increase its dividends to 4% per year indefinitely. What is the company's share price today if cost of equity is 11%? Show your workings.

Explain why analysing cash flows is important for maximizing shareholder wealth.