Question
Lorry Inc. considers an investment of 7 000 000 in 2021. The firm estimates that the revenue of the firm will be 30 000 000
Lorry Inc. considers an investment of 7 000 000 in 2021. The firm estimates that the revenue of the firm will be 30 000 000 in 2022 without the investment but 36 000 000 with the investments. The sum of COGS and General Costs without investment will be 22 000 000 without investment and 25 000 000 with the investment. This investment (which is a machine) is subject to a 5 year straight line depreciation. Also the investment leads to an additional maintenance cost of 250 000. The inventories are expected to be 200 000 in 2022 without investment but 280 000 with investment. Account receivables in 2022 are expected to be 90 000 without investment but 120 000 with investment. Account payables may also increase from 40 000 to 50 000 in case of the investment.
Calculate the free cashflow of that investment for year 2022.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started