$1$:$($Calculating free cash flows$)$ Racin$$ Scooters is introducing a new product and

has an expected change in EBIT of $$475,000.$ Racin$$ Scooters has a $21$ percent marginal tax rate. Bonus depreciation will be $$250,000$ in year $1.$ In addition, the project

will cause the following changes in year $1$:

WITHOUT THE PROJECT WITH THE PROJECT

Accounts receivable $$45,000$ $$63,000$

Inventory $ $65,000$ $$80,000$

Accounts payable $$70,000$ $$94,000$

What is the project$$s free cash flow in year $1?$