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 $1.5 million for this report, and I am not sure their analysis makes sense. Before we spend the $20 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 28.000 16.800 Sales revenue - Cost of goods sold = Gross profit - General, sales, and administrative expenses - Depreciation = Net operating income - Income tax 11.200 1.600 2.000 28.000 16.800 11.200 1.600 2.000 7.6000 2.66 4.940 28.000 16.800 11.200 1.600 2.000 28.000 16.800 11.200 1.600 2.000 7.6000 2.66 4.940 7.6000 2.66 7.6000 2.66 = Net income 4.940 4.940