B. Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year for

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B. Bay Properties is considering starting a commercial real estate division. It has prepared the following four-year for

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B Bay Properties Is Considering Starting A Commercial Real Estate Division It Has Prepared The Following Four Year For 1
B Bay Properties Is Considering Starting A Commercial Real Estate Division It Has Prepared The Following Four Year For 1 (47.7 KiB) Viewed 57 times
B. 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: (4 marks) Year 1 Year 2 Year 3 Year 4 Free cash flow -$185,000 +$12,000 +$99,000 +$240,000 Assume cash flows after year 4 will grow at 3% per year, forever. If the cost of capital for this division is 14%. 1. What is the continuation value in year 4 for cash flows after year 4? II. What is the value today of this division?
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