(Calculating

free cash

flows)

Racin' Scooters is introducing a new product and has an expected change in EBIT of

$475,000.

Racin' Scooters has a

21

percent marginal tax rate. The project will produce

$250,000

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

LOADING...

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

The project's free cash flow in year 1 is

$nothing.

(Round to the nearest dollar.)

	WITHOUT THE PROJECT	WITH THE PROJECT
Accounts receivable	45000	63000
Inventory	65000	80000
Accounts payable	70000	94000