Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Explain in detail how the Mughal Empire was established in India

Answered: 1 week ago

Question

Problem: Evaluate the integral: I - -[ze dx

Answered: 1 week ago