Free cash flows-what is the current value of operations

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BNM Corporation is a consulting company specializing in R programming and advanced Excel applications. Analysts project the following free cash flows (FCFs) during the next 3 years: -$10.0 million at the end of Year 1, $14 million at the end of year 2, and $22 million at the end of year 3, after which FCF is expected to grow at a constant 6% rate thereafter. Its cost of capital is WACC = 12%.

What is the current value of operations for BNM?

Suppose consultants believe that the firm miscalculated WACC. They estimate WACC is really 12.5%. What is the current value of operations now? How did it change?

Reference no: EM131056797

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