Suppose the expected free cash flow for Year 1 is $250,000 but it is expected to grow unevenly over the next 3 years: FCF2 = $290,000 and FCF3 = $320,000, after which it will grow at a constant rate of 7%. The expected interest expense at Year 1 is $80,000, but it is expected to grow over the next couple of years before the capital structure becomes constant: Interest expense at Year 2 will be $95,000, at Year 3 it will be $120,000 and it will grow at 7% thereafter. The tax rate and unlevered cost of equity remain at 40% and 14%, respectively. Cost of debt = 8%.

FCF4 = $342,400

Unlevered Horizon Value of Operations = $4,891,428.57

Current Value of Operation = $3,960,009.67

Firm U: Horizon Value of Tax Shield @ Year 3 = $0

Firm L: Horizon Value of Tax Shield @ Year 3 = $457,142

1. What is the current value of the tax shield?

2. What is the current total value?

Please Show Work / Formulas!! Thanks!