(Related

to Checkpoint

12.1)

(Calculating changes in net operating working capital)Tetious Dimensions is introducing a new product and has an expected change in net operating income of

$755,000.

Tetious Dimensions has a

31

percent marginal tax rate. This project will also produce

$185,000

of depreciation per year. In addition, this project will cause the following changes in year 1:

	Without the Project		With the Project
Accounts receivable	$60,000		$87,000
Inventory	95,000		181,000
Accounts payable	72,000		117,000

(Click

on the icon

in order to copy its contents into a

spreadsheet.)

What is the project's free cash flow in year 1?

Question content area bottom

Part 1

The free cash flow of the project in year 1 is

$enter your response here.

(Round to the nearest dollar.)