New Millenium Company earned $2.2 million in net income last year. It took depreciation deductions of $299,000 and made new investments in working capital and fixed assets of

$104,000 and $345,000 respectively.

a. What was New Millenium's free cash flow last year?

b. Suppose that the company's free cash flow is expected to grow at 4% per year forever. If investors require a return of 7% on Millenium stock, what is the present value of Millenium's future free cash flows?

c. New Millenium has 3.7 million shares of common stock outstanding. What is the per-share value of the company's common stock?

d. What is the company's P/E ratio based on last year's earnings (i.e., trailing earnings)?

e. What is the company's P/E ratio based on next year's earnings (assuming that earnings grow at the same rate as free cash flow).