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Suppose that this firm is projected to have after-tax net income of $18 million next year with a depreciation expense of $6 million, $5 million
Suppose that this firm is projected to have after-tax net income of $18 million next year with a depreciation expense of $6 million, $5 million in capital expenditures, and a $1 million increase in net working capital. What is the firms free cash flow next year? If this free cash flow is expected to grow by 15%, 12%, and 10% in years 2-4, respectively, what is the present value of the firms operations in years 1-4?
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