Construct a new version of Table 4.7, assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6, 11% in year 7, 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business?

TABLE 4.7

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9 10 10.00 1120 12.54 1405 15.31 16.69 18.19 19.29 20.44 21.67 20 134 151 169 84 2.00 218 2.31 245 2.60 1.20 1.34 51 126 1.38 150 1.09 1.16 1.23 1.30 0.00 0.00 0.00 0.42 0.46 009 .16 1.23 10 1.20 12.54 14.05 15.31 16.69 18.19 19.29 20.44 21.67 22.97 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 012 0.12 0.12 0.12 0.12 0.09 0.09 0.09 006 0.06 0.06 0.06 0.12 0.12 0.12 0.09 0.09 0.09 0.06 0.06 0.06 7 Asset value, start of year Earnings Investment Free cash flow (FCF) Asset value, end of year Return on assets (ROA) Asset growth rate Earnings growth rate, from previous year