Delizzia, a family owned business, produces and delivers potatochips to supermarkets and mom & pop stores. Located in BuenosAires, Argentina, Delizzia is planning to expand its operations tocover other major Argentinian cities such as Cordoba and Rosario.This expansion will require Delizzia to set up a new distributioncenter and acquire new vehicles for last-mile distribution. Due tobudget constraints, the company will only be able to expand to onecity at a time. Therefore, Delizzia needs to decide if investing inCordoba or Rosario makes more economic sense. The company isconsidering a time horizon of five years to make the decision.Assume the tax rate is 40% and the discount rate for Delizzia is15%. Ignore inflation.

The table below shows the projections (incremental sales, COGS,operating expenses and depreciation) anticipated for expandingDelizzia's operations to Cordoba in millions of Argentinepesos.

Cordoba's Incremental Income Statement (in millions ofArgentine pesos)

	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	56	80	140	156	130
COGS	30	34	64	67	52
Gross Income	26	46	76	89	78
Operating Expenses	11	22	40	46	39
Operating Income (EBITDA)	15	24	36	43	39
Depreciation	6	6	6	6	6
Operating Income (EBIT)	9	18	30	37	33
Income Tax	3.6	7.2	12.0	14.8	13.2
Net Operating Profit After Taxes (NOPAT)	5.4	10.8	18	22.2	19.8

Expanding to Cordoba will require an investment of 30,000,000Argentine pesos (to be paid in Year 0) to remodel the rented spacefor the distribution center and purchase the vehicles. Similarly,additional working capital will be required, but it comes in thesecond half of Year 1 after the remodeling is finished. That is whythere is no working capital in Year 0. See table below:

Cordoba's Incremental Adjustments (in millions ofArgentine pesos)

	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Depreciation	-	6	6	6	6	6
Net Capital Expenditures	-30	-	-	-	-	-
Net Working Capital Investment	-	-19	-29	-16	-7	47
Free Cash Flows	-30	-7.6	-12.2	8	21.2

Note.- A negative number for the capital expenditure and workingcapital represents a cash outflow. The positive working capitalcash flow in the final period may not equal the sum of the previousinvestments due to accounting assumptions, such as not collectingall receivables.

The company uses straight-line depreciation over 5 years. Theterminal value is zero.

What are the projected Free Cash Flows for year 5 associatedwith expanding to Cordoba?

What is the NPV for expanding Delizzia's operations toCordoba?