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Racin' Scooters is introducing a new product and has an expected change in EBIT of $455,000. Racin' Scooters has a 34 percent marginal tax rate.
Racin' Scooters is introducing a new product and has an expected change in EBIT of $455,000. Racin' Scooters has a 34 percent marginal tax rate. The project will also produce $130,000 of depreciation per year. In addition, the project will also cause the following changes in year 1:
WITHOUT THE PROJECT | WITH THE PROJECT |
| ||||||||||||
Accounts receivable | $44,000 | $64,000 | ||||||||||||
Inventory | 69,000 | 87,000 | ||||||||||||
Accounts payable | 772,000 | 95,000 What is the project's free cash flow in year 1? |
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