(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 $765,000. Tetious Dimensions has a 33 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1 Without the Project With the Project Accounts receivable $54,000 $95,000 183,000 102,000 Inventory Accounts payable (Click on the icon in order to copy its contents into a spreadsheet.) 74,000 124,000 What is the project's free cash flow in year 1?
(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 $765,000. Tetious Dimensions has a 33 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1 Without the Project With the Project Accounts receivable $54,000 $95,000 183,000 102,000 Inventory Accounts payable (Click on the icon in order to copy its contents into a spreadsheet.) 74,000 124,000 What is the project's free cash flow in year 1?
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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Transcribed Image Text:(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 $765,000. Tetious Dimensions has a 33 percent marginal tax rate. This
project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1
Without the Project
With the Project
Accounts receivable
$54,000
$95,000
Inventory
102,000
183,000
74,000
(Click on the icon in order to copy its contents into a spreadsheet.)
Accounts payable
124,000
What is the project's free cash flow in year 1?
The free cash flow of the project in yoar 1 is $ (Round to the nearest dollar.)
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