Question: KADS, Incorporated has spent $ 4 0 0 , 0 0 0 on research to develop a new computer game. The firm is planning to
KADS, Incorporated has spent $ on research to develop a new computer game. The firm is planning to spend $ on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $ The machine has an expected life of three years, a $ estimated resale value, and falls under the MACRS sevenyear class life. Revenue from the new game is expected to be $ per year, with costs of $ per year. The firm has a tax rate of percent, an opportunity cost of capital of percent, and it expects net working capital to increase by $ at the beginning of the project. What will the year free cash flow for this project be
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$
$
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