Problem 7 Intro Creminy, Inc. estimates revenue of $87,000, costs of $43,500, and depreciation of $8,000 related to a new project. The marginal tax rate is 34%. The project will require a capital expenditure of $56,000. It will also require an additional $18,000 in current (operating) assets and will create an extra $14,000 in current (operating) liabilities. Part 1 1 8 Attempt 1/20 for 10 pts. What is the operating cash flow? 0+ decima Submit Part 2 1 8 | Attempt 1/20 for 10 pts. What is the change in net working capital? 0+ decima Submit Part 3 7 8 Attempt 1/20 for 10 pts. What is the free cash flow? 0+ decima SubmitIntro Apple is planning to launch a new easy-to-use kitchen appliance with a touchscreen interface, the iToaster. Apple expects to sell 1 million and 2 million units in the first two years after launch, respectively, and then to discontinue this product. Each unit will sell for $200 in the first year after launch, and $150 in the second year. The costs of components and labor are $40 per unit, while salaries and other expenses add up to $10 million in each year the product is sold. The factory that manufactures the iToaster requires an investment of $50 million right now and $25 million one year from now. It will take one year to complete, so production will only start in the second year. The factory will be depreciated linearly to zero over 5 years after its completion. To get production up and running, Apple has to buy components worth $5 million immediately before the launch of the product, and add another $2 million worth of components to its inventory exactly one year later. The firm's marginal tax rate is 34%. Part 1 | Attempt 1/20 for 10 pts. What is the annual depreciation (in $ million)? 0+ decima Submit Part 2 7 8 | Attempt 1/20 for 10 pts. What is the net operating profit after taxes in year 2 (in $ million)? 0+ decima Submit Part 3 1 8 Attempt 1/20 for 10 pts. What is the net operating profit after taxes in year 3 (in $ million)? 0+ decima Submit Part 4 7 8 | Attempt 1/20 for 10 pts. What is the free cash flow (FCF) at the end of year 0 (in $ million)? 0+ decima Submit Part 5 7 8 | Attempt 1/20 for 10 pts. What is the free cash flow (FCF) at the end of year 1 (in $ million)? 0+ decima Submit