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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 a

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 $1.3 million for this report, and I am not sure their analysis makes sense. Before we spend the $15 million on new equipment needed for this project, look it over and give me your opinion "You open the report and find the following estimates (in millions of dollars)(Click on the following icon in order to copy its contents into a spreadsheet)
Earnings Forecast ($ million)
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)
The free cash flow for years 1 to 9 is ! million. (Round to three decimal places and enter a decrease as a negative number.)
The free cash flow for year 10 is $ million. (Round to three decimal places and enter a decrease as a negative number.)
b. If the cost of capital for this project is 10%, what is your estimate of the value of the new project?
The value of the project is $ million. (Round to three decimal places)
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