Jake has estimated several of the project characteristics up to 7 years and is trying to determine a terminal value for the packaging line for the end of year 6(six). The opportunity cost of capital for the packaging line estimate is 10% per year and the projections for year 6 and 7 are below.  For the terminal value, Jake could assume that:
(A) the free cash flows will grow in perpetuity starting at the end of year 7 at a 2% rate,
(B) the packaging line would be valued at the industry forward  P/E (Price/Earnings) average in year 6, which is 18 ,
(C) the packaging line would be valued at the industry average current  P/B (Price/Book Value) average in year 6, which is 2.
                                          Year 6                         Year 7
Sales                            $ 11,430,000               $ 12,000,000
Operating Income       $ 4,680,000                 $ 5,000,000
Net Income                   $ 2,100,000                 $ 2,250,000
Free Cash Flow(FCF)    $ 2,800,000                 $ 3,200,000
Book Value Equity     $ 18,000,000               $ 19,000,000


Which alternative provides the highest terminal value?

a.    A
b.    B
c.    C
d.    They are all the same
e.    Cannot determine with the information