(Calculating changes in net operating working capital)Duncan Motors is introducing a new product and has an expected change in net operating income of

$310,000.

Duncan Motors has a

31

percent marginal tax rate. This project will also produce

$48,000

of depreciation per year. In addition, this project will cause the following changes in year 1:

	Without the Project		With the Project
Accounts receivable	$31,000		$27,000
Inventory	28,000		35,000
Accounts payable	52,000		90,000

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What is the project's free cash flow in year 1?

The free cash flow of the project in year 1 is

$enter your response here.

(Round to the nearest dollar.)