Question: You are working at Peaked Processes, which is considering adding a new product line. Your boss said to you We already owe these consultants $1.275

You are working at Peaked Processes, which is considering adding a new product line. Your boss said to you "We already owe these consultants $1.275 million, and all they estimated is Net Income. Before we spend $16 million on new equipment for this project, look the report over and give me your opinion." Here are the report's estimates (in millions of dollars; note that the question is continued below, so you need to scroll down to see it all): Everything that the consultants have calculated is correct, as far as it goes. The project will require $11 million in working capital upfront (year 0), which will be fully recovered in the last year of the project (year 2). The first relevant period's FCF is: The second relevant period's FCF is: The third relevant period's FCF (if any) is
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