Scorecard Corp. is considering an acquisition of Purple Turtle Corp. Scorecard corp. estimates that acquiring purple turtle will result in incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company.

Data Collected (in millions)

	Year 1	Year 2	Year 3
EBIT	5.0	6.0	7.5
Interest Expense	5.0	5.5	6.0
Debt	31.9	37.7	40.6
Total net operating capital	119.5	121.8	124.1

Purple Turtle is a publicly traded company, and its market-determined pre-merger beta is 1.20. You also have the following information about the company and the projected statements.

Purple Turtle currently has $20.00 million market value of equity and $13.00 million in debt

The risk free rate is 5.5% with 7.60% market risk premium, and the capital asset model produces a pre-merger required rate of return on equity rsl of 14.62%

Purple Turtles cost of debt is 7.50% at a tax rate of 35%

The projections assume that the company will have a post horizon growth rate of 5.00%

Current total net operating capital is $116.0, and the sum of existing debt and debt required to maintain a constant capital structure at the time of acquisition is $29 million

The firm has no non-operating assets, such as marketable securities

With the given information, use the free cash flow to equity (FCE) approach to calculate the following values in the merger analysis:

A) FCFE horizon value

B) Value of FCFE