1. ABC Corporations is introducing a new product and has an expected change in net operating income of $475,000. To examine the possibility of introducing this new product, ABC has performed a marketing research in the last year that has had a cost of $80,000. ABC Co. has a 34% marginal tax rate. Should ABC decide to invest in this project, there will be a $100,000 depreciation expense per year. In addition, this project will cause the following changes:

	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 projects free cash flow?