Start with the partial model in the file Ch21 P08 Build a Model.xlsx on the textbooks Web site. Kasperov Corporation has an unlevered cost of equity of 12% and is taxed at a 40% rate. The 4-year forecasts of free cash flow and interest expenses are shown in the following table; free cash flow and interest expenses are expected to grow at a 5% rate after Year 4. Using the compressed APV model, answer the following questions.
							INPUTS (In millions)		Projected
							Year		1	2	3	4
Free cash flow		$200.0	$280.0	$320.0	$340.0
Interest expense		$100.0	$120.0	$120.0	$140.0
Long-term growth rate		5%
Tax rate		40%
Unlevered cost of equity		12.00%

a. Calculate the estimated horizon value of unlevered operations at Year 4 (i.e., immediately after the Year-4 free cash flow).
		Current	Projected
			1	2	3	4
Free cash flow			$200.0	$280.0	$320.0	$340.0
Horizon unlevered value of operations