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 $18 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): Sales revenue - Cost of goods sold = Gross profit - General, sales, and administrative expenses - Depreciation = Net operating income - Income tax = Net income 2 1 30.000 18.000 30.000 18.000 12.000 12.000 1.440 1.440 1.800 1.800 8.7600 3.066 5.694 8.7600 3.066 5.694 9 30.000 18.000 12.000 1.440 1.800 8.7600 3.066 5.694 10 30.000 18.000 12.000 1.440 1.800 8.7600 3.066 5.694 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.)