(Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $290,000. Duncan Motors has a 36 percent marginal tax rate. This project will also produce $51,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project $34,000 27.000 53,000 With the Project $20,000 36,000 91,000 Accounts receivable Inventory Accounts payable (Click on the loan in order to copy da contents into a spreadsheer) What is the project's free cash flow in year 17 The free cash flow of the project in year 1 is $. (Round to the nearest dollar) COLO
(Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $290,000. Duncan Motors has a 36 percent marginal tax rate. This project will also produce $51,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project $34,000 27.000 53,000 With the Project $20,000 36,000 91,000 Accounts receivable Inventory Accounts payable (Click on the loan in order to copy da contents into a spreadsheer) What is the project's free cash flow in year 17 The free cash flow of the project in year 1 is $. (Round to the nearest dollar) COLO
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 6P
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(Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $290,000. Duncan
Motors has a 36 percent marginal tax rate. This project will also produce $51,000 of depreciation per year. In addition, this project will cause the following changes in year 1:
Without the Project
$34,000
27.000
53,000
With the Project
$20,000
36.000
91,000
Accounts receivable
Inventory
Accounts payable
(Click on the loon in order to copy ds contents into a spreadsheer)
What is the project's free cash flow in year 17
The free cash flow of the project in year 1 is $. (Round to the nearest dolar)
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