Suppose that HomeNets products are direcly shipped from the manufacturer to HomeNets customers , who will pay directly the manufacturer . HomeNet expects 15% of annual sales of $ 13,000,000 to be on credit , whereas it expects that it will owe to its manufacturers 15% of 5,500,000 of goods sold. How does the above information affect a projects free cash flows with a 4 years life? Net Working Capital= Cash +Inventory +Receivables -Payables

\begin{tabular}{|l|l|r|r|r|r|r|} \hline 1 & Year & 0 & 1 & 2 & 3 & 4 \\ \hline 2 & Net Working Capital Forecast (\$000s) & & & & & \\ \hline 3 & Cash Requirements & 0 & 0 & 0 & 0 & 0 \\ \hline 4 & Inventory & 0 & 0 & 0 & 0 & 0 \\ \hline 5 & Receivables (15\% of Sales) & 0 & 1,950 & 1,950 & 1,950 & 1,950 \\ \hline 6 & Payables (15\% of COGS) & 0 & -825 & -825 & -825 & -825 \\ \hline 7 & Net Working Capital & 0 & 1,125 & 1,125 & 1,125 & 1,125 \\ \hline \end{tabular}