Question 4 5 points Save Answer To calculate the free cash flows for a project we will need to know what the networking capital requirements of the project are. Below are working capital forecasts for years 1 and 2 of a project. Calculate the change in net working capital for year 2. Express your result S-millions and round to two decimals (do not include the s-sign in your answer). Enter increases in net working capital as positive numbers and decreases in net working capital as negative numbers. Working Capital Forecasts (in S-millions) Year 1 Year 2 Accounts receivables 20 21 Inventory Accounts payables 24 16 6 6 Question 5 5 points Save Answ You are tasked with examining a project for Bore Industries. You know that without the project Bore will generate pre-tax income of $60 million each year in perpetuity. You have forecasted the following financial information of the project. Assuming a marginal tax rate of 25%, which of the following statements is true? Project Forecasts in S-thousands Year 0 1 2 EBIT (5,000) 10,000 5,000 1. Taking this project will result in tax savings of $1,250,000 for the firm at time 0. This will have no effect on the free cash flow of the project at time 0. oll. Taking this project will result in additional taxes of $1,250,000 for the firm at time 0. This will have no effect on the free cash flow of the project at time o O III. Taking this project will result in tax savings of $1,250,000 for the firm at time 0. This will increase the free cash flow of the project at time 0. IV. Taking this project will result in additional taxes of $1,250,000 for the firm at time 0. This will decrease the free cash flow of the project at time 0. Question 6 5 points Save Answer You are trying to value the following project for your company. You know that the project will generate free cash flows in perpetuity that will grow at a constant annual rate of 2% after year 2. The applicable interest rate for this project is 9%. What is the NPV of this project? Express your result in $- millions (do not include the S-symbol in your answer). If you calculate a negative NPV enter a negative number. Free Cash Flow Forecasts (in 5 millions) Year 0 2 Free Cash Flows -6 18 17 ne