O Points: 0 of 4 Save You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.7 million for this report, and I am not sure their analysis makes sense. Before we spend the $20 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): 1 2 9 10 Sales revenue 32.000 32.000 32.000 32.000 - Cost of goods sold 19.200 19.200 19.200 19.200 = Gross profit 12.800 12.800 12.800 12.800 - General, sales, and administrative expenses 1.600 1.600 1.600 1.600 - Depreciation 2.000 2.000 2.000 2.000 = Net operating income 9.2000 9.2000 9.2000 9.2000 - Income tax 3.22 3.22 3.22 3.22 nc b. If the cost of capital for this project is 16%, what is your estimate of the value of the new project? Value of project = $ million (Round to three decimal places.)