Question
1. You are considering adding a new division into your existing firm. This will entail an increase in inventory of $8006, an increase in accounts
1. You are considering adding a new division into your existing firm. This will entail an increase in inventory of $8006, an increase in accounts payables of $2281, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the new division is _______________. Enter your answer in dollars and round to the nearest dollar.
2. Company XYZ, an all-equity firm, reported incremental revenues (net income) of $304 million for the most recent year. The firm had depreciation expenses of $110 million and capital expenditures of $197 million. The company also had an increase in net working capital of $20 million. What is the free cash flow? Enter your answer in dollars and round to the nearest dollar.
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