Answer:
$184791
Explanation:
The calculation of the value of the firm is given below:
Year Future Cash Flow PVF at 12.2% PV of Cash Flow
1 11000 0.891 9801
2 12500 0.794 9925
3 16000 0.708 11328
Total 31054
Present Value of Terminal Value
= [16000 × (1 + 0.045) ÷ 0.122 - 0.045] × 0.708
= [16720 ÷ 0.077] × 0.708
= 153737
Now
value of Firm = 31054 + 153737
= $184791