Castle View Games would like to invest in a division to develop software for video games. To
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Castle View 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):
Year 1 Year 2 Year 3 Year 4 Year 5 Cash 7 10 14 14 16 Accounts Receivable 22 24 23 24 23 Inventory 4 7 11 12 16 Accounts Payable 16 21 25 25 31 Assuming that Castle View 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.
AppendixLO1
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Related Book For
Corporate Finance The Core
ISBN: 9781292431611
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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