Question
16. For project A, the cash flow effect from the change in net working capital is expected to be -300 dollars at time 2, the
16. For project A, the cash flow effect from the change in net working capital is expected to be -300 dollars at time 2, the level of net working capital is expected to be 1,200 dollars at time 0, and the level of net working capital is expected to be 2,000 dollars at time 2. What is the cash flow effect from the change in net working capital expected to be at time 1?
17. For project A, the change in net working capital is expected to be 800 dollars at time 0, the cash flow effect from the change in net working capital is expected to be -500 dollars at time 1, and the level of net working capital is expected to be 1,900 dollars at time 2. What is the cash flow effect from the change in net working capital expected to be at time 2?
18. What is the expected after-tax cash flow from selling a piece of equipment if Litchfield Design purchases the equipment today for 70,000 dollars, the tax rate is 10 percent, the equipment is sold in 3 years for 10,000 dollars, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 32 percent, 26 percent, 24 percent, 11 percent, and 7 percent, respectively?
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