Solve

D Spartan Enterprises has a project for which they forecast the following income statement and balance sheet items using the percent of sales method. Item Sales $200,000 $220,000 Costs (40%% of sales) $80,000 $88,000 Depreciation (25% of Prior Net Long Term Assets) $50,000 $55,000 Interest (5% of Prior Debt) $4,000 $4,400 Unlevered Net Income (Computed Directly) $70,000 $77,000 Free Cash Flow (Computed Directly) $44,000 $48,400 Net Capital Assets (110% of Sales) $220,000 $242,000 Working Capital (33% of Sales) $66,000 $72,600 Debt (40% of Assets) $88,000 $96,800 Marginal tax rate 35%% 35% The project continues past year 2. Use this information to answer the following two questions about the project. (The numbers for these question can be downloaded here ! ) D Question 14 2 pts What is the cash flow resulting from the change in working capital expected to be in year 2 of the project? 0 -$6,600 O $72,600 O -$72,600 O .$6,600