Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.0 million and cost of
You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.0 million and cost of goods sold of $3.00 million. You will be depreciating a $1.0 million machine for 5 years using straight-line depreciation. Your tax rate is 21%. Finally, you expect net working capital to increase from $200,000 in year 2 to $300,000 in year 3. What are your pro forma earnings for year 3? What is your pro forma free cash flow for year 3? Complete the following pro forma statement. (Round to the nearest dollar.) Pro Forma Income Statement Sales COGS Depreciation EBIT Tax Earnings Add Back Depreciation Subtract Change in NWC Free Cash Flow $ Year 3
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started