Grupo Traxin is a publicly traded company in the Mexican transportation industry. Traxin has significantly benefitted from the sharp increase in demand for long-haul transportation services in the aftermath of the pandemic, and in particular, from the drastic growth in the last mile delivery and storage services market since 2020. Traxins management team is assessing a new investment in the logistics and technology division, which is currently the fastest growing line of business. Overall, the investment requires incremental resources for capital expenditures, working capital requirements, etc. as described below:

Required initial capital expenditures today: $200 million. Given the technological nature of the asset, it will be fully depreciated in four years. Subsequently, the assets will have no remaining book or market value. Depreciation will follow the straight-line depreciation approach.

Working capital (net): $50 million initially, $50 million in year 1, years 2 and 3. In year 4, the net working capital dedicated to this project will be zero.

The new investments are expected to generate new sales of $500 million for each of the three subsequent years (years 1 to 3). Thereafter, new sales will be fully eroded due to the rapidly evolving nature of competition in this segment. The costs resulting from the new venture (excluding depreciation) are expected to be $227 million in years 1, 2 and 3. Depreciation will be expensed annually and separately as described above. Lastly, te corporate income tax rate is 30%.

What are the Free Cash Flows in Year 3?

a) 173.60

b) 168.40

c) 209.85

d) 147.35

e) 156.10

f) 206.10

g) 198.60

h) 230.90