You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5 million and cost of goods sold of $3 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 21%. Finally, you expect working capital to increase from $200,000 in year 2 to $300,000 in year 3.

A) What are your pro forma earnings for year 3?

B) What are your pro forma free cash flows for year 3?

Answer rating: 100% (QA)

A Pro forma earnings for year 3 5 million sales 3 million cost of goods sold 1 million depr... View the full answer