Year 0 sales of XYZ firm are $124.9 million. Sales are expected to grow at 6% from their year o level. Core operating profit margin is expected to be 8%. Asset turnover on beginning of period NOA is expected to be 1.8. the payout ratio is expected to be 40%. The required return on operations is 10% and the after tax cost of debt is 4%. The following forecasts were made: Year 0 Year 1 Year 2 Year 3 124.90 9.80 74.42 132.39 140.34 10.59 11.23 Sales (growing at 6%) Operating income (PM = 0.08) NOA Reol (10% charge) Growth rate for Reol 148.76 11.90 What is the expected NFO of the firm in year 1? (Note: the book value of XYZ equity was 66.72 in year 0). a. $7.70 million b. $8.01 million O c. $7.39 million d. $5.08 million e. none of the above