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SpaceTech is considering a new project with the following projections for Year 2. Year 2 Projections EBIT $400,000 Interest Expense $20,000 Depreciation Expense $40,000 Tax

SpaceTech is considering a new project with the following projections for Year 2.

Year 2 Projections

EBIT $400,000

Interest Expense $20,000

Depreciation Expense $40,000

Tax Rate 40%

Incremental Net Working

Capital Needs $200,000

How to get the answer = $230,000?

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