URGENTT

Rowan plc is considering investing in a project and will use the net present value method to carry out an appraisal. The project will require an increase in inventories of 60,000 during the first year. It will also result in an increase in trade receivables of 40,000 and an increase in trade payables of 35,000 during the first year. The project requires equipment costing 200,000, which will be acquired at the beginning of the first year. This equipment will be depreciated evenly over its estimated life of four years with no residual value. During the first year, them operating profit is expected to be 350,000. What is the estimated net cash flow during the first year of the project? (Ignore taxation) O 195,000 O 395,000 O 85,000 O 135,000

Rowan plc is considering investing in a project and will use the net present value method to carry out an appraisal. The project will require an increase in inventories of 60,000 during the first year. It will also result in an increase in trade receivables of 40,000 and an increase in trade payables of 35,000 during the first year. The project requires equipment costing 200,000, which will be acquired at the beginning of the first year. This equipment will be depreciated evenly over its estimated life of four years with no residual value. During the first year, them operating profit is expected to be 3 f. 0,000 . What is the estimated net cash flow during the first year of the project? (Ignore taxation) 195,000 395,000 85,000 135,000