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2. Leak Inc. forecasts the free cash flows (in millions) shown below. If
the weighted average cost of capital is 11% and FCF is expected to grow
at a rate of 5% after Year 2, what is the Year 0 value of operations,
in millions? Assume that the ROIC is expected to remain constant in Year
2 and beyond (and do not make any half-year adjustments). Year: 1 2
Free cash flow: -$50 $100 a. $1,456 b. $1,529 c. $1,606 d. $1,686 e.