Buit plc is trying to estimate its value under the current strategy. The managerial team have forecast the following profits for the next five years:

Depreciation of fixed capital items in each of the first two years is £2m. In each of the following three years it is £3m. This has been deducted before arriving at the profit figures shown above. In years 1, 2 and 3 capital expenditure will be £5m per year which both replaces worn-out assets and pays for fresh investment to grow the business. In the fourth and fifth year capital expenditure will be £3m.
The planning horizon is four years. Additional working capital will be needed in each of the next four years. This will be £lm in year 1, £1.2m in year 2, £1.5m in year 3 and £1.8m in year 4.
The company is partially financed by debt - it owes £20m - and partially by equity capital. The required rate of return (WACC) is 10 per cent.
The forecast profit figures include a deduction for interest of £1.2m per year, but do not include a deduction for tax, which is levied at 30 per cent of forecasted profits, payable in the year profits are made.
The company also owns a number of empty factories that are not required for business operations. The current market value of these is £16m.
Required
a. Calculate the future cash flows for the company to an infinite horizon - assume year 5 cash flows apply to each year thereafter. Discount the cash flows and calculate the present value of all the cash flows.
b. Calculate corporate value and shareholder value.

Year Em Em Em Em Em Forecast profit 12 14 15 16 16