Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): 1. Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The change in working capital for year 1 is $nothing million. (Round to the nearest integer.) The change in working capital for year 2 is $____________________ million. (Round to the nearest integer.) The change in working capital for year 3 is $__________________________ million. (Round to the nearest integer.) The change in working capital for year 4 is $nothing million. (Round to the nearest integer.) The change in working capital for year 5 is $_________________________ million. (Round to the nearest integer.) 1: Data Table Year 1 Year 2 Year 3 Year 4 Year 5 1 Cash 6 12 15 15 15 2 Accounts Receivable 21 22 24 24 24 3 Inventory 5 7 10 12 13 4 Accounts Payable 18 22 24 25 30
Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): 1. Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The change in working capital for year 1 is $nothing million. (Round to the nearest integer.) The change in working capital for year 2 is $____________________ million. (Round to the nearest integer.) The change in working capital for year 3 is $__________________________ million. (Round to the nearest integer.) The change in working capital for year 4 is $nothing million. (Round to the nearest integer.) The change in working capital for year 5 is $_________________________ million. (Round to the nearest integer.) 1: Data Table Year 1 Year 2 Year 3 Year 4 Year 5 1 Cash 6 12 15 15 15 2 Accounts Receivable 21 22 24 24 24 3 Inventory 5 7 10 12 13 4 Accounts Payable 18 22 24 25 30
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 10
Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars):
1.
Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.)
The change in working capital for year 1 is
$nothing
million. (Round to the nearest integer.)The change in working capital for year 2 is
$____________________
million. (Round to the nearest integer.)The change in working capital for year 3 is
$__________________________
million. (Round to the nearest integer.)The change in working capital for year 4 is
$nothing
million. (Round to the nearest integer.)The change in working capital for year 5 is
$_________________________
million. (Round to the nearest integer.)1: Data Table
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Year 1
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Year 2
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Year 3
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Year 4
|
Year 5
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|||||
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1
|
Cash
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6
|
|
12
|
|
15
|
|
15
|
|
15
|
|
|
2
|
Accounts Receivable
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21
|
|
22
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24
|
|
24
|
|
24
|
|
|
3
|
Inventory
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5
|
|
7
|
|
10
|
|
12
|
|
13
|
|
|
4
|
Accounts Payable
|
18
|
|
22
|
|
24
|
|
25
|
|
30
|
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