11 32. Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on Year 0 11 2 3 100.000 100.000 100.000 Sales (Revenues) Cost of Goods Sold (50% of Sales) Depreciation 50.000 50.000 50,000 30.000 30,000 30.000 E EBIT 20.000 20.000 20.000 Taxes (35%) 7.000 7.000 7,000 13.000 13,000 13,000 = unlevered net income 30.000 30.000 30,000 5,000 5,000 + Depreciation + increase/(decrease) in working capital capital expenditures 5,000 |-90,000 The free cash flow for the first year of Epiphany's project is a. $45,600 b. $28,500 c. $38,000 d. $53,200