(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
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(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?
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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