Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $300,000. Duncan Motors has a 34 percent marginal tax rate. This project will also produce $50,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the ProjectAccounts receivable $33,000 $23,000Inventory $25,000 $40,000Accounts payable $50,000 $86,000 The free cash flow of the project in year 1 is $ (Round to the nearest dollar.)
Calculating changes in net operating working capital)
Duncan Motors is introducing a new product and has an expected change in net operating income of $300,000. Duncan Motors has a 34 percent marginal tax rate. This project will also produce $50,000 of depreciation per year. In addition, this project will cause the following changes in year 1:
Without the Project With the Project
Accounts receivable $33,000 $23,000
Inventory $25,000 $40,000
Accounts payable $50,000 $86,000
The
(Round to the nearest dollar.)
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