Company Forecasts the Free Cash Flows (In Millions) Shown Below

question 9

Multiple Choice

company forecasts the free cash flows (in millions) shown below.The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3.Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?
Year: 1 2 3
Free cash flow: -$15 $10 $40

• A)$315
• B)$331
• C)$348
• D)$367
• E)$386

Identify management approaches based on the situation and management theories.

Differentiate between Theory X and Theory Y management styles.

Describe the characteristics of open and closed systems in organizations.

Apply the concepts of scientific management and its contribution to modern management practices.

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Definitions:

Daily Cash Flow

A financial report showing the net amount of cash that is received or dispersed by a business within a given day.

Receipts

Documents that acknowledge the receipt of goods or the receipt of a transaction.

Fraudulent E-Mails

Deceptive emails sent with the intention of tricking recipients into parting with their money, personal details, or both.

Wire Fraud

A fraudulent scheme to intentionally deprive another of property or honest services via telecommunications or the internet.