You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber 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 $26.6million 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):

Earnings Forecast 1 2 . . . 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 2.128 2.128 2.128 2.128 - Depreciation 2.660 2.660 2.660 2.660 Net Operating Income 5.212 5.212 5.212 5.212 - Income Tax 1.824 1.824 1.824 1.824 Net Income 3.388 3.388 3.388 3.388

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?

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber 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 $26.6 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): Project Year Earnings Forecast 1 2 ... 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 2.128 2.128 2.128 2.128 - Depreciation 2.660 2.660 2.660 2.660 = Net Operating Income 5.212 5.212 5.212 5.212 - Income Tax 1.824 1.824 1.824 1.824 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.)