Amazon wants to make and sell its own smartphones. It will cost $$190$ million initially to build the factory over the course of $12$ months, which will be sold for $$80$ million $10$ years after production starts. The factory will be depreciated linearly to $$0$ over $10$ years. Amazon already owns the land on which the factory will be built. The land could currently be sold for $$10$ million $($after taxes$)$ and was purchased for $$2$ million eight years ago.

After completion of the factory at the end of year $1,$ Amazon expects earnings before interest and taxes $($EBIT$)$ of $$34$ million each year for $10$ years $($in years $2$ to $11).$ The company also has to add inventory $($components$)$ worth $$10$ million just before operation starts at the end of the first year.

Amazon's marginal tax rate is $28\%$ and the appropriate cost of capital for this project is $6\%.$

Part $1$

$1$ Attempt $\frac{3}{5}$ for $8$ pts$.$

What is net capital spending in year $0,$ i$.$e$.,$ at the start of the project $($in $ million$)?$

Part $2$

Attempt $\frac{3}{5}$ for $8$ pts$.$

What is the cash flow from assets in year $0($in $ million$)?$

Part $3$

Attempt $\frac{3}{5}$ for $8$ pts$.$

What is the cash flow from assets in year $1($in $ million$)?$

Part $4$

Attempt $\frac{1}{5}$ for $10$ pts$.$

What is the annual depreciation in year $2($in $ million$)?$