a. Given the available information, what is the free cash flow in year 0?

b. What is the cash flow in year 1?

c. What is the cash flow in year 10?

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1 million for this report, and I am not sure their analysis makes sense. Before we spend the $25 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in thousands of dollars) Project Year 30,000 18,000 12,000 2 30,000 18,000 12,000 30,000 18,000 12,000 10 30,000 18,000 12,000 Sales revenue - Cost of goods sold Gross profit - General, sales, and 2,000 2,500 7,500 2,625 4,875 2,000 2,500 7,500 2,625 4,875 2,000 2,500 7,500 2,625 4,875 administrative expenses - Depreciation Net operating income - Income tax Net Income 2,000 2,500 7,500 2,625 4,875 All of the estimates in the report are correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year 0), which is what the accounting department recommended. The consultants have estimated that the project will require S10 million in working capital upfront (year 0), which will be fully recovered in year 10