what is the free cash flow for year 9?

12. (19 points) Note: this problem does not require you to discount cash flows but only to calculate the cash flow at year 9. A firm is considering introducing a new product line. The firm would need spend $6 million on equipment today that could be depreciated straight-line over 11 years; the project requires no other capital expenditure. At year 9, the firm expects to sell 1.3 million items at $7 each. It would have production and materials cost of $5.20 per item plus additional operating costs of $340,000. Having recorded year 9 depreciation, the firm would sell the equipment at year 9 for $1.7 million. The corporate tax rate is 21%. The firm would take on debt - for the project and incur year-9 interest expense of $0.62 million. The following asset and liability account projections for the project 2 3 Year Inventory Accounts Receivable Accounts Payable 8 9 $1,200,000 0 $1,400,000 $900,000 $1,500,000 $400,000 10 0 0 11 0 5