Problem: The expected future cash flows for a firm have been forecasted in two stages and correspond to two time periods. Stage one is a finite horizon from years 1 to 5. Stage two is the remaining infinite horizon from year 6 to infinity. Assignment: Eliminate the (stage two) infinite horizon cash flows and recompute the value of the firm and the value added by the firm using the same five methods. Then, switch to evaluating a project while maintaining no infinite horizon cash flows. Compute the value of future cash flows and the NPV of the project using the same five methods. Finally, restore the infinite horizon cash flows and compute the value of future cash flows and the NPV of the project using the same five methods. Note: Start by considering firm valuation with no infinite, Essentially, we are assuming that that firm lasts for 5 years and then is liquidated for an After-Tax Salvage Value of $600. Required: 1) Given these forecasted cash flows, compute the current value of the firm and the value added by the firm using five equivalent methods: (a) Adjusted Present Value (b) Free Cash Flow to Equity (c) Free Cash Flow to the Firm (d) Dividend Discount Model and (e) Residual Income Problem: The expected future cash flows for a firm have been forecasted in two stages and correspond to two time periods. Stage one is a finite horizon from years 1 to 5. Stage two is the remaining infinite horizon from year 6 to infinity. Assignment: Eliminate the (stage two) infinite horizon cash flows and recompute the value of the firm and the value added by the firm using the same five methods. Then, switch to evaluating a project while maintaining no infinite horizon cash flows. Compute the value of future cash flows and the NPV of the project using the same five methods. Finally, restore the infinite horizon cash flows and compute the value of future cash flows and the NPV of the project using the same five methods. Note: Start by considering firm valuation with no infinite, Essentially, we are assuming that that firm lasts for 5 years and then is liquidated for an After-Tax Salvage Value of $600. Required: 1) Given these forecasted cash flows, compute the current value of the firm and the value added by the firm using five equivalent methods: (a) Adjusted Present Value (b) Free Cash Flow to Equity (c) Free Cash Flow to the Firm (d) Dividend Discount Model and (e) Residual Income