The following is a five-year discounted cash flow (DCF) forecast for Middlestates Electric, Inc., an electric utility company [Use spreadsheet Workbook Chapter 9 Problem 8]:

($ MM)	Year 1	Year 2	Year 3	Year 4	Year 5
Operating income	2,039	2,325	2,169	2,430	2,615
Taxes	712	813	777	870	937
Depreciation and amortization	1,299	1,413	1,470	1,527	1,584
Change in working capital	(169)	294	(223)	163	(205)
Capital expenditures/asset sales	(1,754)	(3,432)	1,180	(2,720)	(2,133)
Free cash flow	703	(213)	3,819	530	924

Cash flows over the next five years are expected to fluctuate significantly due to key acquisitions and restructuring measures planned by Middlestates. After the fifth year, however, cash flow is expected to stabilize. Economists expect the long-term inflation rate to stabilize at 2.0 percent, and Middlestates expects real growth in sales to be 2.0 percent or less. Management has determined that the cost of capital is 10.28 percent. [Use spreadsheet Valuation Workbook provided]

Estimate Middlestates' enterprise value.