Part A: What is the relevant NWC cash flow for year 1? Be sure to denote...
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Part A: What is the relevant NWC cash flow for year 1? Be sure to denote incremental cash outflows as negatives, and incremental cash inflows as positives. Part B: What is the relevant NWC cash flow for year 2? Be sure to denote incremental cash outflows as negatives, and incremental cash inflows as positives. A proposed two-year project will have the following initial incremental forecasts at the beginning of the project. Cash reserves Receivables Inventory Payables $510 $900 $300 $270 Cash reserves are expected to remaining unchanged until the end of the project, but each of the other accounts is expected to grow at the rate 6.1% per year. The incremental net working capital will be recouped at the end of the project (i.e., in two years). Part A: What is the relevant NWC cash flow for year 1? Be sure to denote incremental cash outflows as negatives, and incremental cash inflows as positives. Part B: What is the relevant NWC cash flow for year 2? Be sure to denote incremental cash outflows as negatives, and incremental cash inflows as positives. A proposed two-year project will have the following initial incremental forecasts at the beginning of the project. Cash reserves Receivables Inventory Payables $510 $900 $300 $270 Cash reserves are expected to remaining unchanged until the end of the project, but each of the other accounts is expected to grow at the rate 6.1% per year. The incremental net working capital will be recouped at the end of the project (i.e., in two years).
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Part A To calculate the relevant net working capital NWC cash flow for year 1 we need to determine t... View the full answer
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date:
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