(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 $780,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $205,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project $58,000 103,000 75,000 in order to copy its contents into a spreadsheet) free cash flow in year 1? With the Project $93,000 181,000 115.000 Accounts receivable Inventory Accounts payable (Click on the icon What is the project's
(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 $780,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $205,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project $58,000 103,000 75,000 in order to copy its contents into a spreadsheet) free cash flow in year 1? With the Project $93,000 181,000 115.000 Accounts receivable Inventory Accounts payable (Click on the icon What is the project's
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 $780,000. Tetious Dimensions has a 30 percent marginal
tax rate. This project will also produce $205,000 of depreciation per year. In addition, this project will cause the following
changes in year 1:
Without the Project
$58,000
103,000
75,000
With the Project
$93,000
181,000
115,000
Accounts receivable
Inventory
Accounts payable
(Click on the icon in order to copy its contents into a spreadsheet.)
What is the project's free cash flow in year 1?
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