You are an analyst at Dewey, Cheatum, and Howe. A mutual fund manager presents the

following free cash flow data for XYZ Corp (in millions of $).

Year Cash Flow

2011 300

2012 500

2013 600

2014 700

2015 500

She asks you to please calculate the:

Geometric Total Return

Annualized Rate of Growth in cash flow

Then, the mutual fund manager asks you to make a 10 year forecast based upon the

annualized rate of growth.

Finally, she asks you to calculate the present value of the forecasted cash flows assuming

a weighted average cost of capital of 8%.