Statistics homework help. In Excel P715 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 firms value usingseveral possible assumptions about the growth rate of cash flows.a. What is the firms value if cash flows are expected to grow at an annual rate of0% from now to infinity?b. What is the firms value if cash flows are expected to grow at a constant annualrate of 7% from now to infinity?c. What is the firms 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…

Statistics homework help