Using the following free cash flow data:

YearCash Flow

2014$1,500,000

2015$2,300,000

2016$3,000,000

2017$3,400,000

2018$1,800,000

a.Calculate geometric total return

b.Annualized rate of return

c.Prepare 10 year cash flow forecast based upon the annualized rate of growth in cash flow

d.Calculate the net present value of the such fore-casted cash flows assuming an immediate investment cost of $18,500,000

a.Estimate cost of capital using the following data:

Market value of debt - $600,000

Market value of equity - $1, 400,000

Current yield on debt - 7.3%

Tax rate - 35%

Expected market return - 12%

Current 10 year US Treasury - 3.8%

Beta - 2.1