Question: I just need (a) answerred. It's not showing the next question You are a manager at Percolated Fiber, which is considering expanding its operations in
I just need (a) answerred. It's not showing the next question
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 $1.0 million for this report, and I am not sure their analysis makes sense. Before we spend the $25 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): (Click on the Icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Project Year Earnings Forecast ($ million) 1 2 9 10 Sales revenue 30.000 30.000 30.000 30.000 - Cost of goods sold 18.000 18.000 18.000 18.000 = Gross profit 12.000 12.000 12.000 12.000 - Selling, general, and administrative expenses 2.000 2.000 2.000 2.000 - Depreciation 2.500 2.500 2.500 2.500 = Net operating income 7.500 7.500 7.500 7.500 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 and enter a decrease as a negative number.)
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