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Give reasons too.. You are trying to estimate the incremental after-tax cash flow for an investment analysis for ChemCare, a specialty chemical company. You have
Give reasons too..
You are trying to estimate the incremental after-tax cash flow for an investment analysis for ChemCare, a specialty chemical company. You have been provided with the operating income for the first year of the project: - Revenues $ 350million - Cost of goods sold $ 150million Depreciation $ 70 million (Includes $10 million depreciation on existing assets) - Allocated overhead $ 80 million (50% of this is a fixed cost) - EBIT $ 50 million -Taxes $ 20 million - Oper. Inc after tax $ 30 million It is estimated that accounts receivable will increase by $ 45 million and accounts payable by $ 25 million during the year, while inventory will be unchanged. The firm has a capital maintenance investment that is 10% of revenues. Estimate the incremental after-tax cash flow in year 1. O a. 45 Ob. 55 O c. 65 O d. 85 O e. 75Step by Step Solution
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