What is the continuation value in year 4 for cash flows

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Question: 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

Free cash flow: Year 1) -160,000 Year 2) 12,000 Year 3) 75,000 Year 4) 191,000

Assume cash flows after year 4 will grow at 2% per? year, forever. If the cost of capital for this division is 10%?,

what is the continuation value in year 4 for cash flows after year? 4? What is the value today of this? division?

Reference no: EM133557702

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