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The projected free cash flows for Tommy's Pizzeria and Taco Restaurant for 2018 through 2021 are given in the table below. After 2021, Tommy's Pizzeria
The projected free cash flows for Tommy's Pizzeria and Taco Restaurant for 2018 through 2021 are given in the table below. After 2021, Tommy's Pizzeria and Taco Restaurant is expected to see its free cash flows increase at an annual rate of 5.0%. Projected Free Cash Flows Tommy's Pizzeria and Taco Restaurant YEAR 2018 2019 2020 2021 FREE CASH FLOW S 345,000 S 375,000 S 400,000 S 425,000 6. (4 pts) Calculate the value of Tommy's Pizzeria and Taco Restaurant if an investor wants a 25.0% rate of return for investing in Tommy's business. Make the calculation for the end of 2017 (i.e., December 31, 2017)
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