The following data are for a target firm in a merger valuation. The analysis is based on the adjusted present value (APV) approach. Calculate the unlevered horizon value of the firm.

Current market value of equity	$70
Value of debt	$20
Debt ratio	0.60
Cost of unlevered equity	10%
WACC	12%
Growth rate after the horizon: g	4%
Tax rate: T	40%
	Current	Year 1	Year 2	Year 3
Revenues		$115.00	$125.00	$150.00
Cost of goods sold		80.00	95.00	110.00
Selling and administration expenses		10.00	12.00	13.00
Depreciation		10.00	10.00	10.00
EBIT		$15.00	$8.00	$17.00
Interest charges		$2.00	$2.50	$3.00
Total net operating capital	$200.00	$205.00	$208.00	$215.00

Question 1 options:

1)

$55.47

2)

$80.67

3)

$20.80

4)

$67.28

5)	None of the above

Refer to above data. Calculate the value of the target firm's operations.

Question 3 options:

1)

$55.47

2)

$80.67

3)

$20.80

4)

$67.28

5)	None of the above