Your frm would the to evaluate a proposed new operating divisisn. You have forecasted cash flows for this division for the next five years., and have estimated that the cost of captal is ils. You would like to estimate a continuasion value. You have made the folowing forecasts for the last year of your flve-year forecasting harifon (in milicons of dolars). (Cick on the following icon o. in oder to copr iss conterts into a spreadsheet.) a. You forecast that future free cash flows affer year 5 wal grow at 3% per year, forever. Estimate the contruation value in ywar 5. using the perpetuity with groweh formula. b. You have identfied soveral fems in the same industry as your operating division. The average P/E ratio for these fems is 26 . Estimate the continuation value assuming the PiE ratio for yout. division in year 5 wil be the same as the average P.E ratio for the comparable firms boday. c. The average marketbook ratio for the comparabie ferms is 2.3. Estimate the continuation value using the marketbook rato. Note Assume that al firms (induding yours) have no dobt. 2. You forecast that future ftee coth flows after year 5 wil grow at 3% per year, forever. Estimate the continuation value in year 5 . using the perpetuty with growth formula. The conthuation value in year 5 is 1 milion. (Round to one decimal place)