need help with question 7 , i have all the information needed including answer . just need a step by step on how to get the answer .

7. Given the answers to questions 2c,3b,5, and 6 , and assuming no further capital expenditures, calculate the annual FCF for years one, two, and three (including all terminal values for year 3 ). Ans: $425,000 in year one, $694,400 in year two, and $2,838,544.20 in year three. 1. A 3-year project requires the acquisition of equipment that cost $2 million (including shipping and installation) and a $500,000 structure to be built on a plot of land already owned by the parent company. The plot was purchased some time ago by the company for $60,000 for use in another project that never took off and the plot has been lying idle since then. The current appraised value of the plot is $120,000. If the project takes off, it will require an initial investment of $150,000 in NWC. The project manager has received a guarantee from the parent company that, in three years, it will repurchase the structure (including the plot of land) at $620,000 (with no tax implication since it is an internal transaction). Assume no depreciation expense for the structure. Q1: Calculate the initial investment needed for the project: Ans. $2,770,000 2. The $2 million equipment will be depreciated on a straight-line basis over the next three years, a. Assuming that the equipment has a useful life of five years, calculate the accumulated depreciation by the end of year three. Ans. $1,200,000. b. Calculate the book value of the asset at the end of year three. Ans. $800,000 c. On second thought, the project manager decides to use stright-line depreciation to depreciate the equipment to a book value of S1.1 million by the end of year three. Recalculate the annual depreciation expense: 3. The project manager estimates that the salvage value or the equpuer wim most probably be $1.4 million at the end of year threc. Assume 25% tax rate. a. Calculate the ATSV of the equipment using the resilt of Q2,b above. Ans: $1,250,000 b. Recalculate the ATSV of the equipment using Q2.C above. Ans: $1,325,000 4. If the project is adopted, sales of its produet are estimated at 300,000 units in year one and that is expected to grow by 6% per year for the following two years. The price per unit is expected to be \$10/unit in year one, increasing by 4% per year for the following two years (round P3 to two decimals). Calculate the dollar revenues for each of the next three years. Ans: $3,000,000 in year one, $3,307,200 in year two, and $3,647,205,60 in year three. 5. The variable cost is expected to be $6 per unit for each of the following three years. The fixed costs are expected to be $680,000 in each of the three years. Calculate the EBIT of the project in years one through three using the answer for Q2.c for depreciation expense. Ans: $220,000 in year one, $419,200 in year two, and $644,725.60 in year three. 6. The net working capital is expected to increase from the initial $150,000 given in Q1 above to $190,000 in year one, then decrease to $110,000 in year two (before it is fully recovered in year three). Calculate the increases in NWC in years one, two and three. Ans. $40,000 in year one, $80,000 in year two, and $110,000 in year three