Washed Water, a technology manufacturer that produces water purification products for businesses, had net cash flows of R14 280 000 from operating activities in 2017. Dividends are R1 245 000. Inventory cost R11 645 000 in 2017, with equipment repairs and maintenance amounting to R1 445 000. Its 2016 free cash flow (FCF) is calculated as R5 135 000.

1.6.1 Washed Water is predicting its FCF next year (year 1) to be R5 000 000. The free cash flows are expected to grow by 7% each year. The company has a weighted average cost of capital of 16%. Ignoring the FCF from previous years, calculate the NPV of the companys future FCFs.

Use Template below for calculations.

	Year 1	Year 2	Year 3
FCF
Terminal value
Total FCF value
NPV =