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In a new project, the marketing team provides you with the following estimates: Year 1: Sales 4,000 units at $100/unit Year 2: Sales 5,500 units
In a new project, the marketing team provides you with the following estimates: Year 1: Sales 4,000 units at $100/unit Year 2: Sales 5,500 units at $105/unit Year 3: Sales 6,000 units at $108/unit. The variable cost of producing each unit is $65 and remains constant over the three years. The fixed costs are $150,000 per year. Required initial net working capital investment is $60,000 and NWC will maintain a level equal to 20% of sales each year thereafter. Based on this information, which of the following statement is true? Question 29 options: cash inflow for NWC release in year 3 will be of of $129,600 cash outflow for changes in NWC in year 2 will be $30,000 cash inflow for NWC release in year 2 will be of of $35,500. cash outflow for changes in NWC in year 1 will be $0 cash outflow for changes in NWC in year 0 will be $80,000
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