New Millenium Company earned $2.9million in net income last year. It took depreciation deductions of $298,000 and made new investments in working capital and fixed assets of $95,000 and $343,000, respectively.

a. What was NewMillenium's free cash flow lastyear?

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

c. New Millenium has 3.2million shares of common stock outstanding. What is theper-share value of thecompany's commonstock?

d. What is thecompany's P/E ratio based on lastyear's earnings(i.e., trailing earnings)?

e. What is thecompany's P/E ratio based on nextyear's earnings(assuming that earnings grow at the same rate as free cashflow).