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 million for this report, and I am not sure their analysis makes sense. Before we spend the 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):

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 $1.2 million for this report, and I am not sure their analysis makes sense. Before we spend the $19 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): 9 Sales revenue Cost goods sold Gross profit General, sales, and administrative expenses Depreciation = Net operating income - Income tax 1 2 34.000 34.000 20.400 20.400 13.600 13.600 1.520 1.520 1.900 1.900 10.1800 10.1800 3.563 3.563 34.000 20.400 13.600 1.520 1.900 10.1800 3.563 10 34.000 20.400 13.600 1.520 1.900 10.1800 3.563 . 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 $1.2 million for this report, and I am not sure their analysis makes sense. Before we spend the $19 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): 9 Sales revenue Cost goods sold Gross profit General, sales, and administrative expenses Depreciation = Net operating income - Income tax 1 2 34.000 34.000 20.400 20.400 13.600 13.600 1.520 1.520 1.900 1.900 10.1800 10.1800 3.563 3.563 34.000 20.400 13.600 1.520 1.900 10.1800 3.563 10 34.000 20.400 13.600 1.520 1.900 10.1800 3.563 . 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.)