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Heath and Logan Inc. forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are
Heath and Logan Inc. forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond what is the Year o value of operations, in millions? Year: 2 3 Free cash flow. -$15 $10 $40 O a. $331 b. $315 O c. $348 d. $386 O e. $367
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