You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.1 million and cost of goods sold of $3.06 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $305,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3? Question content area bottom

Pro Forma		Year 3
Sales

COGS

Depreciation

EBIT

Tax

Earnings

Depreciation

Net Working Capital

Free cash flows