You are a manager at Northern Fbre, which is considering expanding its operations in synthotic fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owo these consultants $1.9 milion for this report, and I am not sure their analysis makes sense. Before we spend the $30million 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 milions of dollars): All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchasod today (yoar 0), which is what the accounting dopartment recommended for financial reporting purposes. CRA allows a CCA rate of 45% on the equipment for tax purposes. The report concludes that because the project will increase earnings by $4.290 million per year for ten years, the project is worth $42.9million. You think back to your glory days in finance class and realize there is more work to be donet First you note that the consullants have not factored in the fact that the project wal require $8 million in working capital up front (year 0 ), which will be fully recovered in year 10. Next you see they have attributed $2.4 million of selling. general and administrative expenses to the project, but you know that $1.2 million of this amount is overhead that will be incurred even if the project is not acceptod. Finally. you know that accounting earnings are not the right thing to focus on! b. If the cost of capial for this project is 10%, what is your estimate of the value of the new project