(Solution) - A company forecasts the free cash flows in millions shown -(2025 Original AI-Free Solution)

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A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFS are expected to continue growing at a 5% rate after year 3. Assuming that the ROIC is expected to remain constant in year 3 and beyond, what is the year 0 value of operations, in millions?
Year: 1 2 3
Free cash flow: -$15 $10 $40