10. (Case Study 2) You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your ofce, drops a consultant's report on your desk, and complains, "We owe these consultants $1 million for this report, and I am not sure their analysis makes sense. Before we spend the $25 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 thousands of dollars): Project Year 1 2 9 10 Sales revenue 30,000 30,000 30,000 30,000 30,000 - Cost of goods sold 18,000 18,000 18,000 18,000 18,000 = Gross profit 12,000 12,000 12,000 12,000 12,000 - General, sales, and 2,000 2,000 2,000 2,000 2,000 administrative expenses - Depreciation 2,500 2,500 2,500 2,500 2,500 = Net operating income 7,500 7,500 7,500 7,500 7,500 - Income tax 2,625 2,625 2,625 2,625 2,625 =Netincome 4,875 4,875 4,875 4,875 4,875