Question: Finance

RM Company would like to invest in a division to develop software for video games. The firm is projecting the working capital needed for this operation to evaluate this decision. The CFO has developed the following estimates (in millions of dollars): Cash Accounts receivable Invento Accounts a able Year 1 10 31 10 18 Year 2 15 27 9 26 Year 3 19 22 8 22 Year 4 17 25 12 15 Year 5 15 24 13 30 Please calculate 1) net working capital each year, 2) increases in networking capital each year, and 3) cash flows associated with increases in net working capital each year (Assume that RM company currently does not have any working capital invested in this division). The estimate (in millions of dollars) in year 6 for cash is 0, accounts receivable is 0, inventory is 0, and accounts payable is 0.