PLS ANSWER ALL PARTS WILL UPVOTE!

o scroll down t ital You are a manager at Persimmon Production, which is considering adding a new product line. Your boss said to you "We aready owe these constants $1.2 million, and all they estimated is Net Income. Before we spend 548 miun on new equipment for this project, look the report over and give me your opinion. Here are the reports estimates (in milions of dollars, note that the question is continued below, so y 3 77.0 11.0 77.0 Sales revenue 42.0 42.0 12.0 Cost of goods sold 35.0 35.0 Gross profit 4.0 4.0 40 -Selling, gen. & admin exp -Depreciation 10.0 14.0 16.0 15.0 15.0 15.0 41 Net operating income -Income tax (30%) Not Income 4.1 41 11.0 11.0 11.0 Everything that the consultants have calculated is correct, as far as it goes. The project will require $18 million in working capital upfront (year 0), which will be fully recovered in the last year of the project (year 3) Unfortunately, some of the benefits of this new product line would be from customers switching from your existing products. This erosion or cannibalization would have a net (after tax) effect of 5-6 million per year lost from other products over the three years you would be producing the new product. Last, much management time has been spent trying to analyze whether or not this expansion is desirable, and you estimate that the opportunity cost of the analysis that has already been done has been around $0.3 milion What are the correct free cash flows (FCFS) to be used when evaluating this project? Report them in millions of dollars, not in dotars. Note that the answer is NOT the NPV, but the incremental FCFs needed for each relevant period (Note: Please show your work for the possibility of partial credit. Briefly show your calculations but do not explain them except to label the numbers you give. By labels, I mean column and row headings such as "Depreciation or "Year 2), and make it clear whether you are adding or subtracting I'd prefer that you keep the column/row formatting of the earlier calculations. Do NOT repeat the numbers before Net Income-just show the calculations after that to get the final FCFs v each period 34.0 The first relevant period's FCF is: The second relevant period's FCF is: The third relevant period's FCF is: The fourth relevant period's FCF (if any) is: o scroll down t ital You are a manager at Persimmon Production, which is considering adding a new product line. Your boss said to you "We aready owe these constants $1.2 million, and all they estimated is Net Income. Before we spend 548 miun on new equipment for this project, look the report over and give me your opinion. Here are the reports estimates (in milions of dollars, note that the question is continued below, so y 3 77.0 11.0 77.0 Sales revenue 42.0 42.0 12.0 Cost of goods sold 35.0 35.0 Gross profit 4.0 4.0 40 -Selling, gen. & admin exp -Depreciation 10.0 14.0 16.0 15.0 15.0 15.0 41 Net operating income -Income tax (30%) Not Income 4.1 41 11.0 11.0 11.0 Everything that the consultants have calculated is correct, as far as it goes. The project will require $18 million in working capital upfront (year 0), which will be fully recovered in the last year of the project (year 3) Unfortunately, some of the benefits of this new product line would be from customers switching from your existing products. This erosion or cannibalization would have a net (after tax) effect of 5-6 million per year lost from other products over the three years you would be producing the new product. Last, much management time has been spent trying to analyze whether or not this expansion is desirable, and you estimate that the opportunity cost of the analysis that has already been done has been around $0.3 milion What are the correct free cash flows (FCFS) to be used when evaluating this project? Report them in millions of dollars, not in dotars. Note that the answer is NOT the NPV, but the incremental FCFs needed for each relevant period (Note: Please show your work for the possibility of partial credit. Briefly show your calculations but do not explain them except to label the numbers you give. By labels, I mean column and row headings such as "Depreciation or "Year 2), and make it clear whether you are adding or subtracting I'd prefer that you keep the column/row formatting of the earlier calculations. Do NOT repeat the numbers before Net Income-just show the calculations after that to get the final FCFs v each period 34.0 The first relevant period's FCF is: The second relevant period's FCF is: The third relevant period's FCF is: The fourth relevant period's FCF (if any) is