The additional revenue from a project is estimated to be 80,000 the first year and 100,000 the second. Cost of goods sold is 70 percent of revenue; inventory is 12 percent of COGS and accounts payable 8 percent of COGS. Accounts receivable is 3 percent of revenue.

a. Calculate the investment in net working capital for years 1, 2 and 3.

The investment in net working capital for year 1 =

The investment in net working capital for year 2 =

The investment in net working capital for year 3 =

b. For the first year calculate

(i)Cash receipts from revenue =

(ii)Cash paid to suppliers =

(iii)Cash gross profit =