31000 You are a manager at Percolated Fber, which is considering expanding its operations in synthetic for manufacturing Your boss comes into your office drops consultant's report on your desk, and complains, We owe these consultants $1.4 million for this report, and I am not sure the analysis makes sense fore we spend the $20.5 milion on new cupanded for this project, look it over and me your opinion. You open the report and find the following estimates in millions of dollars Project Year Earnings Forecast 1 2 10 Sales Reven 31000 31.600 31000 -Cost of Goods Sold 18 600 18500 11600 12.000 12.400 12400 12400 -Orar, es and Aive Expenses 2100 2300 2.500 2300 -Detection 2.950 2950 Operating con 7090 7090 2.482 2482 2. Given the walentomaton, where the free can fows in years through to that should be used to evaluate the proposed project? The tradhtow for year in found to the impact) - Won Tee 24R2 - Depreciation 2.950 2.950 2950 2.950 = Net Operating Income 7.090 7,090 7090 7.090 - Income Tax 2.482 2.482 2.482 2.482 = Net Income 4.608 4,608 4.608 4,608 All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year o), which is what the accounting department recommended. They also calculated the depreciation assuming no salvage value for the equipment. The report concludes that because the project will increase samnings by 84.608 million per year for 10 years, the project is worth $46.08 milion. You think back to your glory days in finance class and realize there is more work to be donel First, you note that the consultants have not included the fact that the project will require $72 milion in working capital up front (year O), which will be fully recovered in year 10. Next, you see they have attributed $2.360 milion of seling, general, and administrative expenses to the project, but you know that $1.180 million of this amount is overhead that will be incurred even if the project is not accepted. Finally, you know that accounting earnings are not the right thing to focus on a. Given the walable information, what are the free cash flows in years through 10 that should be used to evaluate the proposed project? b. If the cost of capital for this project is 15%, what is your estimate of the value of the new project? 1. Given the available information, what are the free cash flows in years through 10 that should be used to evaluate the proposed project? The tree cash flow for year in million. (Round to three decimal mal places)