Question: Projected income statement for a project for years 1 and 2 : Revenues $ 4 , 0 0 0 and $ 5 , 0 0

Projected income statement for a project for years 1 and 2: Revenues $4,000 and $5,000; COGS $2,500 and $3,000; Depreciation $500 and $400; EBIT $1,000 and $1,600. Initial capital investment is $3,000. Working capital is 6% of the expected revenue; investment in working capital is made at the beginning of each year. The $4,176firm pays 14% taxes on its profit. Estimate cash flow for Year 2.
The correct answer is $4,176. Tell me the calculation process please.

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