Use the Information below to answer the next three questions:

2018

2019

2020

2021

2022

EBIT

4.3

4.1

4.8

5.11

5.3

Depreciation

1.1

1

1.5

1.6

1.9

Tax

1.29

1.23

1.44

1.53

1.59

Net Capital Spending

0.80

0.90

1.20

1.16

1.20

Change in NWC

0.25

0.45

0.35

0.55

1.05

For Company ABC,the projected cash flow components (in $mil) for the next five years are as follows. WACC is 6% and the growth rate is projected to be 3% for free cash flows during the horizon period after 2021.

Using mid-year convention method:

Q9. What is the sum of the PV of free cash flows between 2018 and 2022? (10 Points)

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Q10. What is PV of terminal value based on perpetual growth approach? (10 Points)

Q11. If EBITDA exit multiple in 2022 is 15.2x, what is the PV of terminal value of ABC company based on EBITDA exit multiple? (10 Points)