The Paper Peddler Plumbing Company has a historical growth in its free cash flows of...
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Finance
The Paper Peddler Plumbing Company has a historical growth in its free cash flows of 3% with little variability. With the addition of a new plant and equipment, however, you expect free cash flows will grow 7% in Year 1, 5% in Year 2, and 4% thereafter. The firms last free cash flow was $100,000. The firm has a required rate of return of 10%. What is the expected value of the firms operations?
A. $1,596,933
B. $1,799,545
C. $1,653,234
D. $2,166,750
E. None of these are correct
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