You are asked to compute the free cash flows for a project with a duration of 4 years. You receive the following relevant selected information:

	0	1	2	3	4	5
Sales	-	22.3722.37	22.3722.37	22.3722.37	22.3722.37	-
Costs of goods Sold	-	11.4311.43	11.4311.43	11.4311.43	11.4311.43	-
Unlevered Net Income	6.486.48	4.074.07	4.474.47	4.604.60	6.886.88	0.370.37
Depreciation	-	0.620.62	0.620.62	0.620.62	0.620.62	0.620.62

In addition you know that 1515% of sales and costs of goods sold are entering and exiting working capital every period.

What is the free cash flow over the whole duration of the project? (rounded to two decimal places)

Select one:

a. 6.48;1.81;3.85;3.98;6.26;0.656.48;1.81;3.85;3.98;6.26;0.65

b. 9.56;1.81;3.85;3.98;6.26;0.659.56;1.81;3.85;3.98;6.26;0.65

c. 8.96;1.81;3.85;3.98;6.26;0.658.96;1.81;3.85;3.98;6.26;0.65

d. 9.56;6.33;5.09;5.22;7.5;1.399.56;6.33;5.09;5.22;7.5;1.39

e. 9.56;3.05;5.09;5.22;7.5;1.899.56;3.05;5.09;5.22;7.5;1.89

True.

Feedback

1. False.
2. True.
3. False.
4. False.
5. False.

The correct answer is: 9.56;3.05;5.09;5.22;7.5;1.89