Question: Dimitra is projecting cash flows for her firm using the percentage of sales method. She projects that the sales will be growing at 4%

Dimitra is projecting cash flows for her firm using the percentage of

Dimitra is projecting cash flows for her firm using the percentage of sales method. She projects that the sales will be growing at 4% per year from the current level of $1M (year 0). She also projects a constant $20K per year in depreciation for the next 5 years. The firm's Net PPE currently stands at $200K. What should be her forecast for Capital Investment in year 3?

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