The recent improvements of your product created a lot of diversification opportunities. The manufacturing head decided to launch a new product range, which will increase the operating profit by $250,000 with an additional depreciation cost of $75,000. The management accountant provides the upcoming year’s (year 1) changes as follows                                  with project                           without project  inventory                 18000                                      27000 payable                     45000                                    66000 receivable               65000                                       42000 Calculate the free cash flow for 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
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The recent improvements of your product created a lot of diversification opportunities. The manufacturing head decided to launch a new product range, which will increase the operating profit by $250,000 with an additional depreciation cost of $75,000. The management accountant provides the upcoming year’s (year 1) changes as follows

                                 with project                           without project 

inventory                 18000                                      27000

payable                     45000                                    66000

receivable               65000                                       42000

Calculate the free cash flow for year 1?

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