Royal Mount Games would like to invest in a division to develop software for video games. 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): (To copy the table below and use in Excel, click on icon in the upper right corner of table.) 1 Cash 2 Accounts receivable 3 Inventory 4 Accounts payable Year 1 6 22 5 17 Year 2 12 26 9 22 Year 3 15 24 11 24 million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) Year 4 16 22 13 28 Year 5 14 25 16 31 Assuming that Royal Mount 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. (Enter increases as negative numbers since they are uses of cash.) The cash flow associated with the change in working capital for year 1 is $ The cash flow associated with the change in working capital for year 2 is $ The cash flow associated with the change in working capital for year 3 is $ The cash flow associated with the change in working capital for year 4 is $ The cash flow associated with the change in working capital for year 5 is $[
Royal Mount Games would like to invest in a division to develop software for video games. 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): (To copy the table below and use in Excel, click on icon in the upper right corner of table.) 1 Cash 2 Accounts receivable 3 Inventory 4 Accounts payable Year 1 6 22 5 17 Year 2 12 26 9 22 Year 3 15 24 11 24 million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) million. (Round to the nearest integer.) Year 4 16 22 13 28 Year 5 14 25 16 31 Assuming that Royal Mount 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. (Enter increases as negative numbers since they are uses of cash.) The cash flow associated with the change in working capital for year 1 is $ The cash flow associated with the change in working capital for year 2 is $ The cash flow associated with the change in working capital for year 3 is $ The cash flow associated with the change in working capital for year 4 is $ The cash flow associated with the change in working capital for year 5 is $[
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:3. Royal Mount Games would like to invest in a division to develop software for video games. 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): (To copy the table below and use in Excel, click on icon in the upper right corner of table.)
1
Cash
2 Accounts receivable
3 Inventory
4 Accounts payable
Year 1
6
22
5
17
Year 2
12
26
9
22
Year 3
15
24
million. (Round to the nearest integer.)
million. (Round to the nearest integer.)
million. (Round to the nearest integer.)
million. (Round to the nearest integer.)
million. (Round to the nearest integer.)
11
24
Year 4
16
22
13
28
Year 5
14
25
16
31
Assuming that Royal Mount 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. (Enter increases as negative numbers
since they are uses of cash.)
The cash flow associated with the change in working capital for year 1 is $
The cash flow associated with the change in working capital for year 2 is $
The cash flow associated with the change in working capital for year 3 is $
The cash flow associated with the change in working capital for year 4 is $
The cash flow associated with the change in working capital for year 5 is $
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