You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of

$55

million and cost of goods sold of

$33

million. You will be depreciating a

$11

million machine for

55

years using straight-line depreciation. Your tax rate is

3535%.

Finally, you expect working capital to increase from

$200 comma 000200,000

in year 2 to

$300 comma 000300,000

in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3?

Complete the following pro forma statement.(Round to the nearest dollar.)

Pro Forma		Year 3
Sales	$