questions:

Thank you!!

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber 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 $17 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): (Click on the Icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Project Year Earnings Forecast ($ million) 2 10 Sales revenue 33.000 33.000 33.000 33.000 - Cost of goods sold 19.800 19.800 19.800 19.800 = Gross profit 13.200 13.200 13.200 13.200 - Selling, general, and administrative expenses 1.360 1.360 1.360 1.360 - Depreciation 1.700 1.700 1.700 1.700 = Net operating income 10.140 10.140 10.140 10.140 a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? The free cash flow for year is $17.000 million. (Round to three decimal places and enter a decrease as a negative number.) The free cash flow for year O is () million. The free cash flow for year 1 to 9 is () million. The free cash flow for year 10 is () million. b. If the cost of capital for this project is 11%, whats your estimate of the value of the new project? The value of project is () million