123 Corp. is evaluating a project to develop new products. The project requires capital expenditure of $113,000
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Question:
123 Corp. is evaluating a project to develop new products. The project requires capital expenditure of $113,000 today. The projected financials in year one are as follows.
- -Incremental sales for the project will be 60,000
- -incremental cost of good sold will be 16,000.
- -incremental selling general and administrative expenses will be 4000
- - annual depreciation expense for the equipment required by the project will be 25,000
- - average tax rate is 20% in marginal tax rate is 30%
- -the level of the networking capital in year zero is 9000 year one is 18,000 year two is 32,000
given the following networking capital levels for year 0 to 2,
What is your estimate of year 0 free cash flow is ?
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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