Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's free cash flows are declining at the constant rate of 6% per year. If its current free cash flow (FCF0) is $4 million and its weighted average cost of capital (WACC) is 11%, what is the estimated value of Brushy Mountain's value of operations?  Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to two decimal places.

Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.41 million per​ year, growing at a rate of 2.3% per year. Goodyear has an equity cost of capital of 8.4%​, a debt cost of capital of 7.2%​, a marginal corporate tax rate of 32%​, and a​ debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant​ debt-equity ratio, what​ after-tax amount must it receive for the plant for the divestiture to be​ profitable?     A divestiture would be profitable if Goodyear received more than ​$enter your response here million after tax.  ​(Round to one decimal​ place.)

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You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $4.4 million and cost of goods sold of $2.64 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $295,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3? Complete the following pro forma statement. (Round to the nearest dollar.) Pro Forma Year 3 Sales COGS Depreciation EBIT Tax Earnings Depreciation Net working capital Free cash flows $

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Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.50 million per year, growing at a rate of 2.5% per year. Goodyear has an equity cost of capital of 8.5%, a debt cost of capital of 7.0%, a marginal corporate tax rate of 35%, and a debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be profitable? A divestiture would be profitable if Goodyear received more than $ million after tax. (Round to one decimal place.)

The MoMi Corporation’s cash flow from operations before interest and taxes was $2 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 20% of pretax cash flow each year. The tax rate is 35%. Depreciation was $200,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The appropriate market capitalization rate for the unleveraged cash flow is 12% per year, and the firm currently has debt of $4 million outstanding. Use the free cash flow approach to value the firm’s equity.

Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.41 million per​ year, growing at a rate of 2.3% per year. Goodyear has an equity cost of capital of 8.4%​, a debt cost of capital of 7.2%​, a marginal corporate tax rate of 32%​, and a​ debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant​ debt-equity ratio, what​ after-tax amount must it receive for the plant for the divestiture to be​ profitable?     A divestiture would be profitable if Goodyear received more than ​$enter your response here million after tax.  ​(Round to one decimal​ place.)

J.B. Enterprises is considering the purchase of new equipment with a cost of             $1,000,000. If the equipment is purchased, the incremental net cash flows are             expected to be $300,000 per year for five years. These net cash flows already reflect the                    of the equipment and the company’s 40% tax rate. However, there are liability risks            associated with the use of this product. The board of directors estimates a “cost of worry” of $25,000 per year. Calculate the net present value of this project incorporating     the cost of worry if the company’s cost of capital is 10%.             a.         $42,466             b.         $340,909             c.         $375,000             d.         $61,420