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PROBLEM 6-14 Given $ Firm free cash flows (years 1 - 5) Cost of capital Terminal value multiple of cash flow (year 5) 30 million

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PROBLEM 6-14 Given $ Firm free cash flows (years 1 - 5) Cost of capital Terminal value multiple of cash flow (year 5) 30 million 12% 5 Solution a: Present value of cash flows for years 1-5 Solution b: Present value of the terminal value in year 5 Solution c: Enterprise Value = PV of interim cash flows + PV of Terminal Value

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