You are now trying to assess the free cashflow to the firm for Environ Systems in the most recent year. The income statement is reported below:

Revenues $1,000

- Cost of goods sold $ 550

- Depreciation $ 150

Operating Profit (EBIT) $ 300

- Interest expenses $ 100

Taxable Income $ 200

- Taxes $ 60

Net Income $ 140

You are also provided with the following information:

The firm reported capital expenditures of $ 100 million in the most recent year

The working capital, inclusive of cash, increased from $ 80 million at the beginning of the year to $105 million at the end of the year; the firms cash balance decreased by $ 15 million during the year and it has no short term debt.

The book value of equity was $ 900 million at the beginning of the year and the book value of debt was $800 million, and a cash balance of 20 million.

Assuming that the firm maintains its return on capital (ROIC) and reinvestment rate from the most recent year for the next 5 years, estimate the expected growth rate