A large company is considering selling off one of its divisions to another firm. Free cash flows expected from this division for upcoming years are forecasted as shown below, and the company would have expected the division to grow 3.4% per year after that indefinitely. The company has a 9.08% cost of capital (i.e., the required rate of return is 9.08%). What is the minimum amount the company should accept as a bid for selling this division to the other firm?

Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Initial Investment	$510,000	$515,000	$523,000	$539,000	$546,000

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To calculate the present value of the expected free cash fl... View the full answer