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Calculating 'cash flows at the start' Adrenaline Corporation (ADR) provides racing car experiences is considering whether to buy a new supercar. The new supercar has
Calculating 'cash flows at the start' Adrenaline Corporation (ADR) provides racing car experiences is considering whether to buy a new supercar. The new supercar has a purchase price of $300,000. The new supercar will result in a decrease in trade receivables for the company from $8,500 to $6,500. ADR predicts that inventory will increase by $10,000 to $23,500. If the new supercar is purchased, ADR will sell used super car parts which they have and which is not compatible with the new supercar. This used supercar parts has a current value of $35,000. and has been fully depreciated for tax purposes. ADR plans to borrow $200,000 in debt to help fund the purchase of the new
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