Sporting Equipment (Pty) Ltd has reported an operating cash flow of R5 million and has stated its intention of spending R1.2 million on replacing outdated fixed assets and increasing inventories with R1.5 million. The company expects its cash flow to grow at 5% per annum over the next three years. The company recently paid a dividend of R300 000 and has advised that it uses a weighted average cost of capital of 10%. a) Calculate the free cash flow of the company by using the free cash flow model. (3) b) Provide a free cash flow forecast for the next three years and a free cashflow valuation of the company using the free cash flow model. In your valuation assume that the free cashflow growth rate in the three year forecast period will remain unchanged in perpetuity. (7)