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Bay Properties is considering starting a commercial real estate division. It has prepared the following...

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Finance

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Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year forecast of free cash flows for this division: Year 3 Year 1 - $160,000 Year 2 $15.000 Year 4 $228.000 Free cash flow $97.000 Assume cash flows after year 4 will grow at 4% per year, forever. If the cost of capital for this division is 8%, what is the continuation value in year 4 for cash flows after year 4? What is the value today of this division? What is the continuation value in year 4 for cash flows after year 4? The continuation value is $ 5928000. (Round to the nearest dollar.) What is the value today of this division? The value today is $ 3976210. (Round to the nearest dollar.)

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