Arnold Inc. is considering a proposal to manufacture high$-$end protein bars used as food supplements by body builders. The project requires use of an existing warehouse, which the firm acquired three years ago for $$3$ million and which it currently rents out for $$133,000.$ Rental rates are not expected to change going forward. In addition to using the warehouse, the project requires an upfro investment into machines and other equipment of $$1\mathrm{.}20$ million. This investment can be fully depreciated straight$-$line over the next $10$ years for tax purposes. However, Arnold Inc. expects to terminate the project at the end of $8$ years and to sell the machines and equipment for $$475,000.$ Finally, the project requires an initial investment into net working capital equal to $10\%$ of predicted first$-$year sales. Subsequently, net working capital is $10\%$ of the predicted sales over the following year. Sales of protein bars are expected to be $$5\mathrm{.}00$ million in the first year and to stay constant for $8$ years. Total manufacturing costs and operating expenses $($excluding depreciation$)$ are $80\%$ of sales, and profits are taxed at $30\%.$

a$.$ What are the free cash flows of the project?

b$.$ If the cost of capital is $16\%,$ what is the NPV of the project?

a$.$ What are the free cash flows of the project?

The FCF for year $0$ is $ $$ million. $($Round to three decimal places.$)$

The FCF for years $1$ through $7$ is $ $$ million. $($Round to three decimal places.$)$

The FCF for year $8$ is $$ million. $($Round to three decimal places.$)$

b$.$ If the cost of capital is $16\%,$ what is the NPV of the project?

The NPV of the project is $ $$ million. $($Round to three decimal places.$)$