Question
You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops aconsultant's
You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops aconsultant's report on your desk, and complains, "We owe these consultants $1.6 million for this report, and I am not sure their analysis makes sense. Before we spend the $21 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 ofdollars):
1 | 2 | . . . | 9 | 10 | |
Sales revenue | 26.000 | 26.000 | 26.000 | 26.000 | |
Cost of goods sold | 15.600 | 15.600 | 15.600 | 15.600 | |
=Gross profit | 10.400 | 10.400 | 10.400 | 10.400 | |
General, sales, and administrative expenses | 1.680 | 1.680 | 1.680 | 1.680 | |
Depreciation | 2.100 | 2.100 | 2.100 | 2.100 | |
=Net operating income | 6.620 | 6.620 | 6.620 | 6.620 | |
Income tax | 2.317 | 2.317 | 2.317 | 2.317 | |
=Net income | 4.303 | 4.303 | 4.303 | 4.303 |
The free cash flow for year 0 is _______. (Round to three decimal places)
The free cash flow for year 1 is _______. (Round to three decimal places)
The free cash flow for year 2 is _______. (Round to three decimal places)
The free cash flow for year 3 is _______. (Round to three decimal places)
The free cash flow for year 4 is _______. (Round to three decimal places)
The free cash flow for year 5 is _______. (Round to three decimal places)
The free cash flow for year 6 is _______. (Round to three decimal places)
The free cash flow for year 7 is _______. (Round to three decimal places)
The free cash flow for year 8 is _______. (Round to three decimal places)
The free cash flow for year 9 is _______. (Round to three decimal places)
The free cash flow for year 10 is _______. (Round to three decimal places)
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