PROBLEMS Following is a free cash flow forecast for Egon's Paranormal Investigations Corporation. Use this information for problems 1-3. ($ millions) NOPAT Free cash flow 2002 2003 22.0 15.0 2004 25.0 10.0 2005 28.0 20.0 (2.0) 1. You expect NO PAT to grow at 3% per year and for free cash flow to be equal to NOPAT, beginning in 2006. The book value of Egon's core operations at December 31,2001 is $100 million and its weighted-average cost ofcapital is 996. a. Forecast Egon's book value of core operations for 2002-2006. b. Forecast Egon's residual income for 2002-2006. c. Calculate the value of Egon's core operations as of December 31, 2001, using the residual income method. iam 1) hu rakino rhe nresent value of Eoon's forecasted