1. Mable Corporation forecasts the following relevant cash flows for a project proposal. They estimate that in year 1 the current assets will increase by $600,000, and current liabilities will increase by $150,000. In modeling the year 1 cash flows, how much should Mable project as the net increase/decrease in working capital? Would this net increase/decrease be an outflow or inflow of cash? Mable Corporation forecasts the following relevant cash flows for a project proposal. They estimate that in year 1 the current assets will increase by $600,000, and current liabilities will increase by $150,000. In modeling the year 1 cash flows, how much should Mable project as the net increase/decrease in working capital? Would this net increase/decrease be an outflow or inflow of cash?
2. Myles Corporation is considering a new computer system (equipment) that can be purchased for $96,000. Delivery will cost $2,000 and setup will cost $6,000. What is the initial cost of this new computer?
3. You are opening your own business and are estimating the following expenses and revenues. Revenues will be $850,000 in year 1 and will grow by 9% for the next two years. The cost of goods sold will be $410,000 in year one and will grow at 6% for the next two years. Operating expenses will be $175,000 in year one and will grow at 5% for the next two years. Taxes will be 28% per year for all years. Depreciation will be $48,000 in year 1, $62,000 in year 2, $37,000 in year 3.Please estimate the cash flows from operations for years 1,2, and 3.