Question: Since growth is stable for ApparelCo you decide to start
Since growth is stable for ApparelCo, you decide to start the continuing value with year 3 economic profits (i.e., economic profits in year 3 and beyond are part of the continuing value). Using the economic profit formula (and data provided in Question 1), what is the continuing value as of year 2? Using discounted economic profit, what is the value of operations for ApparelCo? What percentage of ApparelCo's total value is attributable to the continuing value? How do these compare to Question 3?
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