Question
Tetious Dimensions is introducing a new product and has an expected change in net operating income of $750,000. Tetious Dimensions has a 30 percent marginal
Tetious Dimensions is introducing a new product and has an expected change in net operating income of $750,000.
Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $205,000 of depreciation per year. In addition, this project will cause the following changes in year 1:
| Without the Project | With the Project |
| |||
| Accounts receivable | $53,000 | $86,000 | |||
| Inventory | 102,000 | 181,000 | |||
| Accounts payable | 69,000 | 117,000 | |||
What is the project's free cash flow in year 1?
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Finance And Financial Markets
Authors: Keith Pilbeam
2nd Edition
1403948356, 978-1403948359
