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You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops aconsultant's

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops aconsultant's report on your desk, and complains, "We owe these consultants $1.1 million for this report, and I am not sure their analysis makes sense. Before we spend the $ 27 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):

(Click on the Icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

Project Year

Earnings Forecast ($ million)

1

2

. . .

9

10

Sales revenue

33.000

33.000

33.000

33.000

minusCost

of goods sol

19.800

19.800

19.800

19.800

equals=Gross

profit

13.200

13.200

13.200

13.200

minusSelling,

general, and administrative expense

2.160

2.160

2.160

2.160

minusDepreciation

2.700

2.700

2.700

2.700

equals=Net

operating income

8.340

8.340

8.340

8.340

minusIncome

tax

2.919

2.919

2.919

2.919

equals=

Net

unlevered income

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.)

5.421

5.421

5.421

5.421

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