Question: (Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $295,000
(Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $295,000 Duncan Motors has a 36 percent marginal tax rate. This project will also produce $54,000 of depreciation per yeat In addition, this project will cause the following changes in year 1 Without the Project With the Project Accounts receivable $28,000 $20,000 Inventory 30,000 35,000 Accounts payable 52,000 82,000 (Click on the icon in order to copy its contents into a spreadsheet) What is the project's tree cash flow in year 12 The free cash flow of the project in year 1 is is $ (Round to the nearest dollar)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
