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Project X will require ABC Corp. to purchase equipment at time zero equal to $4,000 Inventory will increase by $200 Accounts payable will rise by
Project X will require ABC Corp. to purchase equipment at time zero equal to | $4,000 |
Inventory will increase by | $200 |
Accounts payable will rise by | $35 |
All other working capital components will stay the same | $0 |
Change in operating networking capital is | $165 |
Dollar value of sales in year one | $17,000 |
Dollar value of sales in year two | $18,000 |
Dollar value of sales in year three | $19,000 |
Dollar value of sales in year four | $20,000 |
The fixed cost of producing the product in year 1 | $1,169 |
The fixed cost of producing the product in year 2 | $1,169 |
The fixed cost of producing the product in year 3 | $1,169 |
The fixed cost of producing the product in year 4 | $1,169 |
The variable cost of producing the product in year one is | $11,900 |
The variable cost of producing the product in year two is | $12,600 |
The variable cost of producing the product in year three is | $13,300 |
The variable cost of producing the product in year four is | $14,000 |
The accelerated depreciation in year one is | $1,320 |
The accelerated depreciation in year two is | $1,800 |
The accelerated depreciation in year three is | $600 |
The accelerated depreciation in year four is | $280 |
Salvage value on the equipment in year four is | $50 |
The amount of net operating working capital recovered in year four is | $75 |
The estimated tax rate is | 28% |
WACC = | 5% |
Given the information in the table, what is the Free Cash-flow in year 3?
$3,430 |
$3,535 |
$3230
|
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