Heath and Logan Incforecasts the Free Cash Flows (In Millions)

Multiple Choice

Heath and Logan Incforecasts 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?

A) $315
B) $331
C) $348
D) $367
E) $386