Question
The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 23 percent. Assume
The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Compute the incremental net income of the investment for each year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
---|---|---|---|---|---|
Investment | $ 27,100 | ||||
Sales revenue | $ 14,200 | $ 15,800 | $ 17,200 | $ 13,700 | |
Operating costs | 3,300 | 3,300 | 5,000 | 3,600 | |
Depreciation | 6,775 | 6,775 | 6,775 | 6,775 | |
Net working capital spending | 340 | 240 | 305 | 190 | ? |
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