The General Motors Corporation is introducing a new product and which is expected to result in

change in EBIT or $700,000. The firm has a 34 percent marginal tax rate. This product will also

produce $200,000 of depreciation per year. In addition, this product will cause the following

changes:

Balance Sheet Account	Without the product	With the product
Accounts receivable	$60,000	$95,000
Inventory	55,000	165,000
Accounts payable	45,000	70,000

1) Calculate the change in net working capital?

2) Calculate the products change in taxes.

3) What is the products free cash flow?