Question: ( Calculating changes in net operating working capital ) Tetious Dimensions is introducing a new product and has an expected change in net operating income

(Calculating changes in net operating working capital)Tetious Dimensions is introducing a new product and has an expected change in net operating income of $780,000. Tetious Dimensions has a 33 percent marginal tax rate. This project will also produce $190,000 of depreciation per year. In addition, this project will cause the following changes in year1:
Without the Project
With the Project
Accounts receivable
$53,000
$93,000
Inventory
104,000
177,000
Accounts payable
65,000
119,000
What is the project's free cash flow in year1?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!