You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $4.4 million and cost of goods sold of $2.64 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $295,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3? Complete the following pro forma statement. (Round to the nearest dollar.) Pro Forma Year 3 Sales COGS Depreciation EBIT Tax Earnings Depreciation Net working capital Free cash flows

You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $4.4 million and cost of goods sold of $2.64 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $295,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3? Complete the following pro forma statement. (Round to the nearest dollar.) Pro Forma Year 3 Sales COGS Depreciation EBIT Tax Earnings Depreciation Net working capital Free cash flows

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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