Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCF) Return on equity (ROE) Asset growth rate Earnings growth rate 1 2 3 4 5 6 7 8 9 10 10.00 11.20 12.54 14.05 15.31 16.69 18.19 19.29 20.44 21.6 1.20 1.34 1.51 1.69 1.84 1.922.00 2.03 1.64 1.7 1.20 1.34 1.51 1.26 1.38 1.50 1.09 1.16 1.23 1.3 0.00 0.00 0.00 0.42 0.46 0.42 0.91 0.87 0.41 0.4 0.12 0.12 0.12 0.12 0.12 0.115 0.11 0.105 0.08 0.0 0.12 0.12 0.12 0.09 0.09 0.09 0.06 0.06 0.06 0.0 0.12 0.12 0.12 0.09 0.04 0.04 0.01 -0.19 0.0 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? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Answer is complete but not entirely correct. Present $ 19.27 million value Step 4 of 4 ~ Step 3: Calculate the present value of terminal cash flow. Terminal cash flow is perpetuity cash flow. Here, the perpetuity cash flows start from year 9. Present value = 1 x 80.930 ] ((1+0.10)' (0.10-0.08) 1 $0.930 2.35790.02 =0.42411$46.50 = $19.721 Therefore, the present value of perpetuity cash flow is $19.721. Step 4: Calculate the value of business. Value of business = Present value of cash flows + Present value of perpetuity cash flow =S0.69923+$19.721 =S20.42023 Therefore, the value of C business is $20.42 Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCE) Return on equity (ROE) Asset growth rate Earnings growth rate 1 2 3 4 10.00 11.20 12.54 14.05 1.20 1.341.51 1.69 1.20 1.34 1.51 1.26 0.00 0.00 0.00 0.42 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.09 0.12 0.12 0.12 5 6 7 8 9 10 15.31 16.69 18.19 19.29 20.44 21.6 1.841.92 2.00 2.031.64 1.7 1.38 1.50 1.09 1.16 1.23 1.3 0.46 0.42 0.91 0.870.41 0.4 0.12 0.115 0.11 0.105 0.08 0.0 0.09 0.09 0.06 0.06 0.06 0.0 0.09 0.04 0.04 0.01 -0.19 0.0 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? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Answer is complete but not entirely correct. $ 19.27 million value Step 3: Calculate the present value of terminal cash flow. Terminal cash flow is perpetuity cash flow. Here, the perpetuity cash flows start from year 9. I S0.930 Present value ((1+0.10) (0.10 -0.08) 1 $0.930 2.35790.02 = 0.42411x$46,50 =$19.721 Therefore, the present value of perpetuity cash flow is $19.721 Step 4: Calculate the value of business. Value of business Present value of cash flows + Present value of perpetuity cash flow -S0.69923+$19.721 $20.42023 Therefore, the value of C business is $20.42 Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCF) Return on equity (ROE) Asset growth rate Earnings growth rate 1 2 3 4 5 6 7 8 9 10 10.00 11.20 12.54 14.05 15.31 16.69 18.19 19.29 20.44 21.6 1.20 1.34 1.51 1.69 1.84 1.922.00 2.03 1.64 1.7 1.20 1.34 1.51 1.26 1.38 1.50 1.09 1.16 1.23 1.3 0.00 0.00 0.00 0.42 0.46 0.42 0.91 0.87 0.41 0.4 0.12 0.12 0.12 0.12 0.12 0.115 0.11 0.105 0.08 0.0 0.12 0.12 0.12 0.09 0.09 0.09 0.06 0.06 0.06 0.0 0.12 0.12 0.12 0.09 0.04 0.04 0.01 -0.19 0.0 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? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Answer is complete but not entirely correct. Present $ 19.27 million value Step 4 of 4 ~ Step 3: Calculate the present value of terminal cash flow. Terminal cash flow is perpetuity cash flow. Here, the perpetuity cash flows start from year 9. Present value = 1 x 80.930 ] ((1+0.10)' (0.10-0.08) 1 $0.930 2.35790.02 =0.42411$46.50 = $19.721 Therefore, the present value of perpetuity cash flow is $19.721. Step 4: Calculate the value of business. Value of business = Present value of cash flows + Present value of perpetuity cash flow =S0.69923+$19.721 =S20.42023 Therefore, the value of C business is $20.42 Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCE) Return on equity (ROE) Asset growth rate Earnings growth rate 1 2 3 4 10.00 11.20 12.54 14.05 1.20 1.341.51 1.69 1.20 1.34 1.51 1.26 0.00 0.00 0.00 0.42 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.09 0.12 0.12 0.12 5 6 7 8 9 10 15.31 16.69 18.19 19.29 20.44 21.6 1.841.92 2.00 2.031.64 1.7 1.38 1.50 1.09 1.16 1.23 1.3 0.46 0.42 0.91 0.870.41 0.4 0.12 0.115 0.11 0.105 0.08 0.0 0.09 0.09 0.06 0.06 0.06 0.0 0.09 0.04 0.04 0.01 -0.19 0.0 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? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Answer is complete but not entirely correct. $ 19.27 million value Step 3: Calculate the present value of terminal cash flow. Terminal cash flow is perpetuity cash flow. Here, the perpetuity cash flows start from year 9. I S0.930 Present value ((1+0.10) (0.10 -0.08) 1 $0.930 2.35790.02 = 0.42411x$46,50 =$19.721 Therefore, the present value of perpetuity cash flow is $19.721 Step 4: Calculate the value of business. Value of business Present value of cash flows + Present value of perpetuity cash flow -S0.69923+$19.721 $20.42023 Therefore, the value of C business is $20.42