You are evaluating the potential purchase of a small business with no debt or preferred stock that is currently generating $42,500 of free cash flow . On the basis of a review of similar-risk investment opportunities, you must earn an 18% rate of return on the proposed purchase. Because you are relatively uncertain about future cash flows, you decide to estimate the firms value using several possible assumptions about the growth rate of cash flows. 1. What is the firms value if cash flows are not expected to grow at all? 2. What is the firms value if cash flows are expected to grow at a constant annual rate of 7% forever? 3. What is the firms value if cash flows are expected