Homework: Homework Three Score: 0 of 2 pts P12-8 (similar to Sav HW Score: 0%, 0
ID: 2821411 • Letter: H
Question
Homework: Homework Three Score: 0 of 2 pts P12-8 (similar to Sav HW Score: 0%, 0 of 20 p aastín Help . In addition this project 30f 10 (0 complete) | > (Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious operating income of $765,000. Teticus Dimensions has will cause the following changes in year 1 Dimensions is introducing a new product and has an expected change in net a 31 percent marginal tax rate. This project will also produce $190,000 of depreciation per year Without the Project $57,000 95,000 66,000 With the Project Accounts rectivable Inventory Accounts payable $86,000 179,000 125,000 What is the project's free cash flow in year 17 d to the nearest dollar)Explanation / Answer
Working Capital increase= $29,000+$84,000-59000=$54,000
Working capital increase will be at the beginning of the project hence at year0
operating profit = $765,000
Tax $237,150
Profit after tax $527,850
Depreciation $190,000
Free Cash Flow $717,150
Hence the Free cash flow in year 1 is $717,150
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