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a You are evaluating a product for your company SOFT, Inc. You estimate the sales to be $ 1,000,000 in year 1; $ 1,500,000 in

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a You are evaluating a product for your company SOFT, Inc. You estimate the sales to be $ 1,000,000 in year 1; $ 1,500,000 in year 2; and $2,000,000 units in year 3. The project has a 3 year life. Variable costs amount to 60% of sales and fixed costs are $ 200,000 per year. The project requires an initial investment of $300,000 in assets which will be depreciated straight- line to zero over the 3-year project life. The actual market value of these assets at the end of year 3 is expected to be $60,000. NWC requirements at the beginning of each year will be approximately 20% of the projected sales during the coming year. The tax rate is 10%. What will the year 1 free cash flow for this project be? $ 130,000 O $ 90,000 O $ 190,000 $ 290,000

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