Consider the following case study and answer the questions.

1. You are the financial analyst for Apple which is investing in a project to develop a new Iphone11.

2. The project will last for 4 years and require an initial capital outlay on new Machinery of $5 million (paid today).

3. The plant will be depreciated to $1 million book value over the 4 years and can be sold in year 4 for $2 million.

4. The revenues from the sale of the new IPhone will be $2.8 million per year for the next four years (starting at the end of year 1). Variable costs will be 20% of revenues for the next four years.

5. Apple's Research and Development department has spent $1 million researching demand for the new product and found that the project is feasible. The revenue for Apple's existing IPhone 10 product is expected drop by $1 million per year for the next four years as a result of the new product.

6. The project requires $30,000 for working capital immediately but it will not require any other working capital investments during its life. This working capital will be recovered in the last year of the project.

7. The tax rate is 30%

8. The project is funded only using ordinary shares which have a required return of 10%. So the cost of capital is 10%

A)Complete the following table to calculate the free cash flows for this project for every year.