Question 3 (Total 7 marks) A. Cash flows for Go-Van X and Go-Van Y are provided below. Assume the required rate of return for both machines is 12%. (3 marks) Year 0 1 2 NPV Go-Van X -$800 $350 $350 ? Go-Van Y -$800 $375 $395 ? Which machine will you choose if they are considered mutually exclusive? B. 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: (4 marks) Year 1 Year 2 Year 3 Year 4 +$240,000 Free cash flow -$185,000 +$12,000 +$99,000 Assume cash flows after year 4 will grow at 3% per year, forever. If the cost of capital for this division is 14%. I. What is the continuation value in year 4 for cash flows after year 4? II. What is the value today of this division