The following pro-forma financial information relates to CMRC Ltd, a communications company for which you are required to develop initial estimates to be used in a future cash flow-based valuation of the firm. Year 0 1 2 3 Income statement ($m) Revenues 23,200 26,565 29,485 31,940 Operating costs -12,930 -15,125 -16,955 -19,340 EBITDA Depreciation -2,170 -2,710 -3,375 -3,890 EBIT Interest expenses -155 -175 -260 -785 Interest income 105 115 200 365 Profit before tax 8,050 8,670 9,095 8,290 Taxes -2,265 -2,490 -2,645 -2,535 Profit after tax 5,785 6,180 6,450 5,755 Balance sheet ($m) Goodwill 365 290 215 135 Net property, plant & equipment 13,855 16,120 21,820 40,510 Accounts receivable & other current assets 4,855 4,685 5,675 6,145 Cash in bank 180 4,090 7,955 9,405 Total assets 19,255 25,185 35,665 56,195 Shareholders' equity 10,225 14,365 22,060 28,550 Deferred income taxes 2,410 3,330 4,225 5,195 Interest-bearing liabilities 1,225 1,330 2,540 10,040 Accounts payable & other liabilities 5,395 6,160 6,840 12,410 Total liabilities and equity 19,255 25,185 35,665 56,195 Assume that no investment in Goodwill is to be undertaken as no acquisitions are to be made over the time horizon being considered. 1. Calculate EBIT and Taxes for years 1 to 3 for the all-equity firm. This is for the purposes of calculating FCFF. Assume that To = 30%. (Note: You wish to treat CMRC as an all-equity firm for the purposes of valuation). 2. Calculate CMRC's Free Cash Flow to the Firm (FCFF) for years 1 to 3 using the method identified in Topic 1 (i.e., based on EBIT for an all-equity firm)