VALUATION. For this and the next 2: Matrix Systems is a fast growing supplier of IT products. Analysts project the following free cash flows (FCF), in millions, during the next 3 years, after which FCF is expected to grow at a constant rate of 5%. The company's weighted average cost of capital (WACC) is 13%. Calculate the horizon value of the firm (i.e. HV3).

	Year 1	Year 2	Year 3
FCF	-$20	$30	$40

Question options:

1)	$525 million

2)	$500 million

3)	$323.08 million

4)	$397.37 million

Calculate the value of the firm today (i.e. the PV of both the FCFs and the horizon value).

Question options:

1)	$525 million
2)	$500 million
3)	$323.08 million
4)	$397.37 million
5)	None of the above