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Hudson Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year forecast of free cash flows for this division.

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Hudson Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year forecast of free cash flows for this division. Year 1 $148,000 The continuation value is $ Year 2 $14,000 Free cash flow Assume cash flows after year 4 will grow at 5% per year, forever. If the cost of capital for this division is 14%, what is the continuation value in year 4 for cash flows after year 4? What is the value today of this division? D GEEKS (Round to the nearest dollar) Year 3 $58,000 Year 4 $192,000

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