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 $1.4 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 27.000 27.000 27.000 27.000 Cost of goods sold 16.200 16.200 16.200 16.200 = Gross profit 10.800 10.800 10.800 10.800 - 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 6.3000 6.3000 6.3000 6.3000 - Income tax 2.205 2.205 2.205 2.205 = Net income 4.095 4.095 4.095 4.095 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 fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.4 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 27.000 27.000 27.000 27.000 Cost of goods sold 16.200 16.200 16.200 16.200 = Gross profit 10.800 10.800 10.800 10.800 - 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 6.3000 6.3000 6.3000 6.3000 - Income tax 2.205 2.205 2.205 2.205 = Net income 4.095 4.095 4.095 4.095 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.)