What are the correct free cash flows for evaluating this project? Start from the correct net income which has already been given.
Extracted text: You are a manager at Percolated Fiber, which is considering expanding its operations. Your boss said to you "We owe these consultants $1.8 million for this report, and all they gave us is Net Income. Before we spend $42 million on new equipment needed for this project, look it 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): 1 Sales revenue 64.0 64.0 64.0 39.0 -Cost of goods sold Gross profit -Selling, gen. & admiņ. exp. -Depreciation Net operating income - Income tax (30%) Net Income 39.0 39.0 25.0 25.0 25.0 3.8 3.8 3.8 14.0 14.0 14.0 7.2 7.2 7.2 2.2 2.2 2.2 5.0 5.0 5.0 se Everything that the consultants have calculated is correct, as far as it goes. The project will require $13 million in working capital upfront (year 0), which will be fully
Extracted text: Everything that the consultants have calculated is correct, as far as it goes. The project will require $13 million in working capital upfront (year 0), which will be fully recovered in the last year of the project (year 3). see scor The project will also utilize other equipment that the consultants did not value separately because the equipment is already owned and not being used in other projects. The equipment could instead be donated to a charity, and the tax benefit of that donation would be $0.7 million (in other words, this is the total amount that your taxes would decrease by in period 0, if you donated the equipment rather than using it for the project). In addition, donating the equipment would generate goodwill and increased reputation which you feel would be worth an additional $1.3 million (in dollars today). see score see score What are the correct free cash flows (FCFS) for evaluating this project? (a) Start from the correct Net Income which has already been given (do not recopy the calculations before NI). (b) Make any additional adjustments needed for each relevant period, in order to get the final, complete set of FCFS. Show each of these adjugtments, properly labelled (by labels, I mean column and row headings such as "Depreciation" or "Year 3"), Do not explain, only label, using the fewest words possible to simply identify what you are counting see score Denat nhansn tha itn dhein illiane nf dallern Ian shm