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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 $1.3 million for this report, and I am not sure their analysis makes sense. Before we spend the $23 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 10 Sales revenue 25.000 25.000 25.000 25.000 - Cost of goods sold 15.000 15.000 15.000 15.000 = Gross profit 10.000 10.000 10.000 10.000 - General, sales, and administrative expenses 1.840 1.840 1.840 1.840 - Depreciation 2.300 2.300 2.300 2.300 = Net operating income 5.860 5.860 5.860 5.860 - Income tax 2.051 2.051 2.0512.051 a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? The free cash flow for year 0 is million. (Round to three decimal places, and enter a decrease as a negative number.)

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