You are a partner in a small restaurant chain and are looking to sell your equity to an outside buyer. You currently own 25% of the firm, and want to have an idea what the firm is worth. Use the information below to answer the following questions. Cost of equity = 12% Expected four year growth = 5% Horizon growth = 2% 1999 2000 $ 5 Rosa's Caf Balance Sheet (In thousands) Assets: Cash Accounts Recelvable Inventory Total Current Assets: Property. Plant & Equipment Less: Accumulated Depreciation Net PPE Total Assets: 562 S 405 151 S 753 S 2001 561 43 149 550 S 42 $ 146 S 740 S ulun 753 $ S 5 4.452 5 1.436s 3,016 S 3.769 5 4,566 5 1,522 5 3,044 5 3,784 $ 4,542 1,500 3,034 $ 3,787 Llabilities: Accounts Payable Current Portion of long-term Debt Total Current Llabilities: Long-term Debt Total Llabilities ului 601 S 10 S 611 5 670 S 612 S 10 S 622 5 650 $ 1,2825 507 10 617 650 5 1.2815 1,267 S Equity: Pald-In Capital Retained Earnings Total Equity: Total Llabilities and Equity 200 S 2.288 S 2488 5 3,769 $ 200 S 2,302 S 2,502 S 3,784 S 200 2.320 2,520 3,787 5 $ 2001 12.096 $ 5 S Rosa's Caf Income Statement (In thousands) Revenue Cost of Goods Sold Gross Profit Selling and General Administrative Depreciation Expense Earnings Before Interest and Tax Interest Taxable income Taxes (30%) Net Income unui 1999 2000 11,643 5 11,827 5 8.943 S 9.002S 2.700 5 2,825 $ 1,644 5 1,647 S 85 5 86 $ 971 5 1.092 S 34 S 33 $ 937 5 1.059 S 281 S 318 S 656 S 741 S 9,165 2,931 1.646 86 1,199 33 1.166 350 816 For the following question, assume that $810,000 was found to be your FCFE in 2001. You now assume that this will grow by 5% for four years before dropping down to a constant 2% growth in the future. If your cost of equity is 12%, what is the horizon value of the firm in four years? $8,204,667 $10,042,513 $9,845,601 $8,368,761