Problem 12-4: Calculating the free cash flows A firm is introducing a new product and expected change
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Question:
Problem 12-4: Calculating the free cash flows
A firm is introducing a new product and expected change in net operating income of SAR 15000,000. Its corporate tax is 23%. The project will also produce SAR 4,000,000 depreciation per year. In addition, this cause the following changes:
Data | ||
Without Project | With Project | |
Accounts Receivable | 375,000 | 550,000 |
Inventory | 425,000 | 575,000 |
Accounts Payable | 650,000 | 825,000 |
Change in EBIT | 15,000,000 | |
Tax rate | 23% | |
Depreciation | 4,000,000 |
Posted Date: