Difficulty level 2 Blue Knight is considering adding a trucking division to expand the coverage of its existing delivery services. The trucking division will cost $1,500,000 and is expected to generate free cash flows of $120,000 for each of the next five years. Future free cash flows are forecasted to grow 3% per year forever after year 5. Blue Knight's cost of capital is 10%. The continuation value for the trucking division at the end of year five (i.e. t=5) is closest to: $1,678,000 $1,200,000 $1,766,000 $1,275,000