Question: *Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit; no hard keys. Problem 12-4: Calculating Free Cash Flows

*Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit; no hard keys.

Problem 12-4: Calculating Free Cash Flows

A firm is introducing a new product and expected change in net operating income of SAR 19,000,000. Its corporate tax is 21%. The project will also produce SAR 3,000,000 depreciation per year. In addition, this cause the following changes:

	Without
	Project	With Project
Accounts Receivable	SAR 450,000	SAR 630,000
Inventory	650,000	800,000
Accounts Payable	700,000	940,000

What is the projects free cash flows for Year 1?

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