You are evaluating the potential purchase of a small business with no debt or preferred stock that is currently generating​$42,200of free cash flow​(FCF 0 ​=​$42, 200​).On the basis of a review of​...

​=​$42, 200​).On the basis of a review of​ similar-risk investment​ opportunites, you must earn​ a(n)18​%rate of return on the proposed purchase. Because you are relatively uncertain about future cash​ flows, you decide to estimate the​ firm's value using several possible assumptions about the growth rate of cash flows.

a. What is the​ firm's value if cash flows are expected to grow at an annual rate of​ 0% from now to​ infinity?

b. What is the​ firm's value if cash flows are expected to grow at a constant annual rate of7​%from now to​ infinity?

c. What is the​ firm's value if cash flows are expected to grow at an annual rate of12​%for the first 2​ years, followed by a constant annual rate of

7​%from year 3 to​ infinity?