Free Cash Flows for the Four-Year Planning Horizon for Amherst

Free cash flows for the four-year planning horizon for Amherst Confectionery Co. Ltd. are projected to increase by $200,000 each year from a Year 1 base at $1.2 million. The company's bonds and mortgages have a market value of $2.7 million and the company's cost of capital is 8%. What is the value of Amherst Confectionery Co. Ltd to its shareholders?

A) $7.9 million
B) $18.7 million
C) $21.4 million
D) $24.7 million
E) $27.4 million