Question: A firm has free cash flows of $1,000, $2,000, and $3,000 at the end of years 1, 2, and 3, respectively. Assume a discount rate

A firm has free cash flows of $1,000, $2,000, and $3,000 at the end of years 1, 2, and 3, respectively. Assume a discount rate of 10%. If the firm has a present value of $8572.50, what is its terminal value? What is the present value of its terminal value?

a.
$2,572.50 ; $1,932.76
b.
-$2,572.50 ; 0
c.
$5,000 ; $3,756.57
d.
$5,000 ; 0

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