Kale Inc. forecasts the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 11.0% and FCF is expected to grow at a rate of 5.0% after Year 2, then what is the firm's total corporate value (in millions)? Do not round intermediate calculations. Year 1 2 Free Cash flow-$50 $115?
A. $1,530
B. $1,833
C. $1,295
D. $1,446
E. $1,682
Answer: E
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Which of the following are drawbacks to applying actual overhead to production?
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