Question
I need help with regard to figuring out a projected year 0 free cash flow. The company is considering a project that requires $1500 initial
I need help with regard to figuring out a projected year 0 free cash flow.
The company is considering a project that requires $1500 initial cost for a new machine that will be depreciated straight line to salvage value of zero on a five-year schedule. The project will require a one time increase in the level at a net working capital of $300. The project will generate an additional $1600 in revenues and $700 in operating expenses each year. The project will end at the end of year too, at which time the machinery is expected to be sold for $800. The companies tax rate is 50%. And a discounted cash flow analysis of this project what would be the project year 0 free cash flow?
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