3. Valuing an Expansion (20 Points) Expansion Corporation wants to increase its production capac- ity. It plans to do so by building a new plant in 2020 that would cost $43 million. The company had capital expenditures of $3 million in 2019 and no capital expenditures are forecast in 2021 and 2022. If the company's sales in 2019 are $240 million and are projected to be $170 milion in 2020 and $250 million in 2021 and $320 million in 2022 answer the following: (a) 8 Points. What would be Expansion Corporation's projected free cash flows every year until 2022 based on the percent of sales method? Fill in all numbers in the table below (Note: All numbers in the table are in millions). 2019 $85 2020 2021 2022 Net Income Depreciation $15 $3 Capital Expenditures Increase in Net Working Capital Free Cash Flow $25 (b) 7 Points. In order to build the new factory, the company will issue $20 million in bonds in 2019. As of 2018, the company has debt of $10 million. In addition, the company pays 10% interest for all of its debt. No debt is expected to be repaid until 2025 and the company will not issue new debt in 2021. It also pays a corporate tax rate of 5%. Given this information, fill in the table below. 2019 2020 2021 2022 Total Debt Interest Expense Interest Tax Shield (c) 5 Points. Given your answers in a), b) and c), how would you calculate the net present value of the company given the expansion if the company has an opportunity cost of capital of 6%? You only need to write down the formula to compute the net present value. You don't have to compute the actual number. (Note: Even if some of your numbers may be incorrect you won't lose any points if you write down the correct expression given your numbers)