Question
1.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
1.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). 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.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Cash | 6 | 12 | 15 | 15 | 15 |
| Accounts receivable | 21 | 22 | 24 | 24 | 24 |
| Inventory | 5 | 7 | 10 | 12 | 13 |
| Accounts payable | 18 | 22 | 24 | 25 |
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Healthcare Finance: An Introduction To Accounting And Financial Management
Authors: Louis Gapenski
6th Edition
1567937411, 978-1567937411
