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Calculating 'cash flows at the end' Fanta Corporation ( FAN ) is a soft - drink manufacturer. In Year zero, FAN will purchase new machinery
Calculating 'cash flows at the end'
Fanta Corporation FAN is a softdrink manufacturer. In Year zero, FAN will purchase new machinery for $ which it expects to use for ten years. In Year zero, FAN agrees to sell the new bottling equipment in ten years time to Solo Corporation a competitor for $
According to the tax office, the new machinery purchased by FAN has a useful life of years. Assume the company tax rate is
At the end of the project, FAN will pay a dividend to its shareholders which totals $ For its own internal management reports, FAN will apply an effective life of years to the new machinery.
In Year zero, the new machinery will require inventory to decrease by $ and accounts payable to increase by $ from the existing figure of $
What are the 'cash flows at the end'?
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