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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

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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 consultant's report on your desk, and complains, "We owe these consultants $1.9 million for this report, and I am not sure their analysis makes sense. Before we spend the $17.8 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 12 9 10 Sales Revenue 26.000 26.000 26.000 26.000 - Cost of Goods Sold 15.600 15.600 15.600 15.600 = Gross Profit 10.400 10.400 10.400 10.400 - General, Sales and Administrative Expenses 1.424 1.424 1.424 1.424 - Depreciation 1.780 1.780 1.780 1.780 = Net Operating Income 7.196 7.196 7.196 7.196 - Income Tax 2.519 2.519 2.519 2.519 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.)

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