of 1 of 1 of 1 of 1 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 0 1 2 3 Sales (Revenues) 125,000 125,000 125,000 Cost of Goods Sold (50% of Sales) 62,500 62,500 62,500 Depreciation 20,000 20,000 20,000 = EBIT 42,500 42,500 42,500 Taxes (35%) 14,875 14,875 14,875 = unlevered net income 27,625 27,625 27,625 + Depreciation 20,000 20,000 20,000 + channes to working cantal - 500 - 500 -5000 O A. $42,625 B. $51,150 C. $59,675 D. $31,969 of 1 nplete of 1 Click to select your answer. U Tear 1 2 Sales (Revenues) 125,000 125,000 Cost of Goods Sold (50% of Sales) 62,500 62,500 Depreciation 20,000 20,000 = EBIT 42,500 42,500 - Taxes (35%) 14,875 14,875 = unlevered net income 27,625 27,625 + Depreciation 20,000 20,000 + changes to working capital -5000 - 5000 - capital expenditures - 90,000 The free cash flow for the first year of Epiphany's project is closest to: 125,000 62,500 20,000 42,500 - 14,875 27,625 20,000 - 5000 O A. $42,625 B. $51,150 c. $59,675 D. $31.969 Click to select your