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 consultants report on your desk and complains, "We owe these consultants $1.4 million for this report, and i am not sure thier analysis makes sense. before we spend the $20 million on new equipment needed for this project, look over it again and give me your opinion." You open the report and find the following estimates (in millions of dollars):

b. if the cost of capital for this project is 8%, what is your estimate of the value of the new project?

Value of project $ ____ million (round to three decimal places)

u are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre ma onsultants $1.4 million for this report, and I am not sure their analysis makes sense. Before we spend th llowing estimates (in millions of dollars): 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 1.600 1.600 1.600 1.600 Depreciation 2.000 2.000 2.000 2.000 = Net operating income 6.8000 6.8000 6.8000 6.8000 Income tax 2.38 2.38 2.38 2.38 Net income 4.420 4.420 4.420 4.420 b. If the cost of capital for this project is 8%, what is your estimate of the value of the new project? Value of project million (Round to three decimal places.) You are a manager at Northern Fibre, which is considering expanding its operations in synthetic one manuturing Your boss comes into your office drops a consultas report on your desk and complew these consultants $1.4 million for this report, and I am not sure the analysis makes sense. Before we spend the $20 million on now equipment needed for this project look it over and give me your opinion You open the port and find the holowing ustimates in milions of dollars 1 2 9 10 Sales venue 26.000 20.000 26.000 26.000 Cost of goods sold 15.800 15.600 15.000 15.600 Gross pro 10400 10.400 10/400 10,00 General, sales, administrative expenses 1.600 1.600 1600 1.600 -Deprecation 2.000 2.000 2.000 2.000 Net operating income 0.0000 6.1000 6.000 600 -Income 2.3 2.36 2.30 230 Net income 4420 4.420 4420 4/420 the cost of capital for this project is 8%, what is your estimate of the value of the new project? Value of projection Mound to three decimal places)