A (Calculating changes in net operating working capital) A company is introducing a new product and has an expected change in net operating income of $790,000 The company has a 33 marginal tax rate This project will also produce $210,000 of depreciation per year In addition, this project will cause the following changes in year 1 without the project with the project accounts receivable $53000 $91000 inventory $97000 $176000 accounts payable $75000 $118000 the free cash flow of the project in year 1 is B Duncan Motors is introducing a new product and has an expected change in net operating income of $310,000 Duncan Motors has a 30 marginal tax rate This project will also produce $51,000 of depreciation per year In addition, this project will cause the following changes in year 1 without the project with the project accounts receivable $37,000 $24,000 inventory $29,000 $34,000 accounts payable $54,000 $88,000 the free cash flow of the project in year one is

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Question: A- (Calculating changes in net operating working capital) A company is introducing a new product and has an expected change in net operating income of

A- (Calculating changes in net operating working capital) A company is introducing a new product and has an expected change in net operating income of $790,000. The company has a 33% marginal tax rate. This project will also produce $210,000 of depreciation per year. In addition, this project will cause the following changes in year 1:

	without the project	with the project
accounts receivable	$53000	$91000
inventory	$97000	$176000
accounts payable	$75000	$118000

the free cash flow of the project in year 1 is:

B- Duncan Motors is introducing a new product and has an expected change in net operating income of $310,000. Duncan Motors has a 30% marginal tax rate. This project will also produce $51,000 of depreciation per year. In addition, this project will cause the following changes in year 1:

	without the project	with the project
accounts receivable	$37,000	$24,000
inventory	$29,000	$34,000
accounts payable	$54,000	$88,000

the free cash flow of the project in year one is :

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