Question
Racin' Scooters is introducing a new product and has an expected change in EBIT of $445,000. Racin' Scooters has a 32 percent marginal tax rate.
Racin' Scooters is introducing a new product and has an expected change in EBIT of $445,000. Racin' Scooters has a 32 percent marginal tax rate. The project will produce $120,000 of depreciation per year. In addition, the project will cause the following changes in year 1:
| WITHOUT THE PROJECT | WITH THE PROJECT |
| ||
| Accounts receivable | $46,000 | $66,000 | ||
| Inventory | 69,000 | 84,000 | ||
| Accounts payable | 74,000 | 97,000 | ||
.
What is the project's free cash flow in year 1?
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Financial Management An Introduction
Authors: Jim McMenamin
1st Edition
0415181623, 9780415181624
