A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13% and the FCF's 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 one frees cash flow-$15, two $10 and third year $40
Please, explain all solution in details. Note that it is in class task and excel is prohibited to use so I have to understand all steps and do them by hand.