This problem has the answers because it's an example . But I need help understanding where does the overhead (after 35%) of 0.572 on page number 2 came from.. ? I can see where all the other numbers on the free cash flow table came from but I can't understand where did the 0.572 came from what was added or minus or multipled to get that amount?

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 S1.9 million for this report, and I am not sure their analysis makes sense. Before we spend the $22 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 comer of the data table below in order to copy its contents into a spreadsheet Project Year Earnings Forecast (s million) 28.000 28.000 28.000 28.000 Sales revenue 16.800 16.800 16.800 16.800 Cost of goods sold 11.200 11.200 11.200 11.200 Gross profit 1.760 1.760 1.760 1.760 Selling, general, and administrative expenses 2.200 2.200 2.200 2.200 Depreciation 7.240 7.240 7.240 7.240 Net operating income 2.534 2.534 2.534 2.534 Income tax 4.706 4.706 4.706 4.706 Net unlevered income All of the estimates in the seem correct. You note that the consultants used straight-line depreciation for the new purchased today (year o), is what the accounting department recommended. The report concludes that because the project increase earnings by per is your halcyon days finance class and realize there is more work to be done! First, you note that the consultants have not factored in the fact that the project will require million in working attributed capital upfront be fully recovered in year 10. ext, you see they have $1.76 million of selling, general and administrative expenses to the project, but you know that s 88 million of this amount is overhead project is not accepted. Finally, you know that accounting earnings are not the right a. Given the available what the cash flows in years o through 10 that should be used to evaluate thing to focus information, are free the proposed project? value of the new project? the cost of capital for this project is 13%, what is your estimate of the a. Given the available information, what are the free cash flows in years o through 10 that should be used to e the proposed project? Free cash flow for year 0 is Year Free Cash Flow million) 22.000 CapEx 12.000 Inc. in NWC 34.000 Free Cash Flow Free cash flows for years 1 to 9 are