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Suppose you are the only owner of a chain of coffee shops near universities. Your current cafs are doing well, but you are interested in
Suppose you are the only owner of a chain of coffee shops near universities. Your current cafs are doing well, but you are interested in starting a fine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financi performance: Financial update as of June 15 Your existing business generates $123,000 in EBIT. The corporate tax rate applicable to your business is 35%. The depreciation expense reported in the financial statements is $23,429. You don't need to spend any money for new equipment in your existing cafs; however, you do need $18,450 of additional cash. You also need to purchase $9,840 in additional supplies-such as cloth tableclothes and napkins, and more formal tableware-on credit. It is also estimated that your accruals, including taxes and wages payable, will increase by $6,150. in free cash flow. Based on your evaluation you have $143,969 $109,529 $94,769 Free cas!!..... "$91,079 cling
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