Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects: 0 Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Capital Cost Allowance = EBIT - Taxes (35%) = unlevered net income + Capital Cost Allowance + changes to working capital - capital expenditures 1 100,000 50,000 13,500 36,500 12.775 23,725 13,500 -5000 2 100.000 50.000 22.950 27.050 9468 17,582 22.950 -5000 100,000 50.000 16,065 33,935 11,877 22,058 16.065 10,000 -90.000 The free cash flow for the first year of Epiphany's project is closest to: $43,000 $45,000 $32,532 $25,000 O $32,225