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American Foods ( AF ) wants to increase its operating efficiency by installing a new inventory management system. The system requires an investment in equipment
American Foods AF wants to increase its operating efficiency by installing a new inventory management system. The system requires an investment in equipment of $ today. The equipment will be depreciated on a straight line basis to a value of zero over a five year life. The first depreciation charge will be recognized one year from now at Year The system will allow AF to reduce its inventory levels one year from now by $ The system is expected to increase AF's revenue by $ each year. Annual pretax expense of $ is required to run the system. If the company's tax rate is what is the incremental free cash flow for the system one year from now at Year
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