1) Year 0 Revenues Cost of Goods Sold Depreciation = EBIT Taxes (35%) = Unlevered net income + Depreciation Additions to Net Working Capital Capital Expenditures Free Cash Flow Year 1 Year 2 Year 3 475,000 475,000 475,000 - 150,000 - 150,000 - 150,000 - 85,000 - 85,000 -85,000 240,000 240,000 240,000 - 84,000 - 84,000 - 84,000 156,000 156,000 156,000 85,000 85,000 85,000 - 20,000 - 20,000 - 20,000 - 325,000 221,000 221,000 221,000 Enterprise Rental Car, a rental car company, is considering buying some new luxury cars. After extensive research, they come up with the above estimates of free cash flow from this project. Visby learns that a competitor is thinking of offering similar services, thus reducing Visby's sales. By how much could sales fall before the present (NPV) was zero, given that the of capital is 8%, and that goods sold is 45% of revenues? A) 28% B) 34% C) 45% D) 56%