Heath and Logan Incforecasts the Free Cash Flows (In Millions)

question 14

Multiple Choice

Heath and Logan Incforecasts 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?

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

---

Definitions:

T-test

An analysis technique employed to assess whether there is a significant difference between the average values of two distinct groups.

Participants

Individuals who take part in a study or experiment, providing data or responses for analysis.

Independent Means

Statistical measures or values that are not influenced by other variables in a study.

Alternative Hypothesis

A statement that contradicts the null hypothesis, suggesting there is a significant difference or effect.