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You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing Your boss comes into your office, drops a

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You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.7 million for this report, and I am not sure their analysis makes sense Before we spend the $25 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) 1 2 9 10 Sales revenue 32.000 32.000 32.000 32.000 - Cost of goods sold 19 200 19. 200 19.200 19.200 Gross profit 12.800 12.800 12.800 12.800 -- General, sales, and administrative expenses 2.000 2.000 2.000 2.000 -Depreciation 2.500 2.500 2.500 2.500 Net operating income 8.300 8.300 8.300 8.300 2.905 - Income tax 2.905 2.905 2.905 a. Given the available information, what are the free cash flows in years o through 10 that should be used to evaluate the proposed project? The free cash flow for year O is $ million. Round to three decrnal places, and ontor a decrease as a negative number)

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