Factrack Inc

question 63

Multiple Choice

Factrack Inc., a biotech firm, is expected to grow rapidly in the next three years and then have a level growth rate for the foreseeable future. The firm expects free cash flows of $342.5 million, $512.3 million, and $750 million over the next three years, and thereafter its cash flows will grow at a steady rate of 8 percent per annum. The company has no nonoperating assets (NOA) . If the appropriate WACC is 11.25 percent, what is the enterprise value of this business? (Round to the nearest million.)

• A) $19,367 million
• B) $18,101 million
• C) $26,190 million
• D) $24,923 million

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Definitions:

Sample Size

The number of observations or data points selected from a population for analysis, which impacts the reliability and accuracy of statistical results.

Specification Limits

Predetermined boundaries set for the acceptable range of product dimensions, materials, or performance standards to ensure quality.

Capability Index

A statistical measure used to assess the ability of a process to produce output within specified limits.

Process Mean

The average value in a set of process measurements, indicating the central tendency over a period of time.