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The tax rate is 40%. The project required an initial investment of $15,000 and an additional investment of $2,000 at the end of year two.

The tax rate is 40%.

The project required an initial investment of $15,000 and an additional investment of $2,000

at the end of year two.

The working capital is anticipated to be 10% of revenues, and the working capital

investment has to be made at the beginning of each period.

a. Estimate the free cash flow to the firm for each of the four years.

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