Statistics homework help. In Excel P715 Common stock value: All growth models You are evaluating the potential purchaseof a small business currently generating $42,500 of after-tax cash flow(D0 = $42,500). On the basis of a review of similar-risk investment opportunities,you must earn an 18% rate of return on the proposed purchase. Because you are relativelyuncertain about future cash flows, you decide to estimate the firms value usingseveral possible assumptions about the growth rate of cash flows.a. What is the firms value if cash flows are expected to grow at an annual rate of0% from now to infinity?b. What is the firms value if cash flows are expected to grow at a constant annualrate of 7% from now to infinity?c. What is the firms value if cash flows are expected to grow at an annual rate of12% for the first 2 years, followed by a constant annual rate of 7% from year 3to infinity?Year042500PVagr 12345674250042500425004250042500425004250036016.94915 30522.84 25866.8121 21921.0272 18577.1417 15743.3404 13341.8139 0%18%Check236,111 236111.1111 NPV 1…
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