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You are trying to assess how different depreciation methods will affect the free cash flows of a project for you company. The current forecasts for
You are trying to assess how different depreciation methods will affect the free cash flows of a project for you company. The current forecasts for year 1 of the project are in the table below. Assume that you can decrease the depreciation expense by $10 million in year 1. By how much would the free cash flow in year 1 change as a result? Express your result in $-millions and round to two decimals (do not include the $-sign in your answer). Enter increases in free cash flows as positive numbers, decreases as negative numbers.
You are trying to assess how different depreciation methods will affect the free cash flows of a project for you company. The current forecasts for year 1 of the project are in the table below. Assume that you can decrease the depreciation expense by $10 million in year 1. By how much would the free cash flow in year 1 change as a result? Express your result in $-millions and round to two decimals (do not include the $-sign in your answer). Enter increases in free cash flows as positive numbers, decreases as negative numbers. Project Forecasts for Year 1 in $ millions) Sales 128 Cost of sales 59 Selling, general and administrative expenses 6 Depreciation 26 Increase in Net Working Capital 6 Capital expenditures 30 Marginal corporate tax rate 20%
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