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.) Year 1 Year 2 Year 3 Year 4 Year 5 1 Cash 5 12 14 16 14 2 Accounts receivable 18 22 23 21 25 3 Inventory 4 9 10 14 15 4 Accounts payable 17 22 24 27 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 $ integer.) million. (Round to the nearest
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.) Year 1 Year 2 Year 3 Year 4 Year 5 1 Cash 5 12 14 16 14 2 Accounts receivable 18 22 23 21 25 3 Inventory 4 9 10 14 15 4 Accounts payable 17 22 24 27 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 $ integer.) million. (Round to the nearest
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: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.)
Year 1
Year 2
Year 3
Year 4
Year 5
1 Cash
5
12
14
16
14
2 Accounts receivable
18
22
23
21
25
3 Inventory
4
9
10
14
15
4 Accounts payable
17
22
24
27
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 $
integer.)
million. (Round to the nearest
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