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: Year 1 2 3 Sales (Revenues) $100,000 $100,000 $100,000 | - Cost of Goods Sold (50% of Sales) 50,000 50,000 50,000 Depreciation 30,000 30,000 30,000 = EBIT 20,000 20,000 20,000 Taxes (35%) 7000 7000 7000 Funlevered net income 13,000 13,000 13,000 + Depreciation 30,000 30,000 30,000 |+/(-) increase/decrease) in working capital 5,000 5,000 -10,000 | capital expenditures -$90,000 The free cash flow for the last year of Epiphany's project is closest to $47,700 $42,400 $53,000 $39,750