Part 4) Cash Flow in Year 3?

Part 3) Free Cash Flow in Year 2

Part 4) Free Cash Flow in Year 3

Due to high demand for wood, San Lorenzo Lumbar la coding buying a new timber outling machine to add to sing wock The machine w cost $3,000 to purchase and $20,000 bbe shipping and Installation Last year, the tem dered an unused area his timber mil to make space for the machine, out of $8.000 The new cutting me allow the company to sell an additional 140,000 pieces of wood per year, at a price of $4 per piece Variable costs, including timberley and labor, are expected badd up to 70% of sales To make best use of the new machine, the company will need to increase its inventory alimber logs by $25.000. Since the firm uses trade credit when purchasing raw timber, accounts payable will increase by $12.000 The cutting machine is expected to last 4 years and will then be sold for $35,000. It falls into the 3-year MACRS class with depreciation rates as follows Year 1 2 3 4 Depreciation rate 33% 45% 15% 7% The firm has a marginal tax rate federal and state of 34% Part 1 IBAttempt 115 for 10 pts What is the initially free cash flow from the project? Choose the right sign Submit Part 2 IBA 5 10 Su Part 3 Its Due to high demand for wood, San Lorenzo Lumber is considering buying a new timber cutting machine to add to its existing stock. The machine will cost $300,000 to purchase and $20,000 for shipping and installation. Last year, the firm cleared an unused area in its timber mill to make space for the machine, at a cost of $8.000. The new cutting machine will allow the company to sell an additional 140,000 pieces of wood per year, at a price of $4 per piece. Variable costs, including timber, electricity and labor, are expected to add up to 70% of sales. To make best use of the new machine, the company will need to increase its inventory of timber logs by $25,000. Since the firm uses trade credit when purchasing raw timber, accounts payable will increase by $12,000. The cutting machine is expected to last 4 years and will then be sold for $35,000. It falls into the 3-year MACRS class, with depreciation rates as follows: Year 1 2 3 4 Depreciation rate 33% 45% 15% 7% . The firm has a marginal tax rate (federal and state) of 34%. 18 Attempt 1/5 for 10 pts. Part 1 What is the initiallyear-o) free cash flow from the project? Choose the right sign Submit IS Artemu 75 for 10 st Part 2 ha is the free cash flow in year Subm