Question

Racin' Scooters is introducing a new product and has an expected change in EBIT of $ 455000. ​Racin' Scooters has a 31 percent marginal tax rate. The project will produce ​$100000 of depreciation per year. In​ addition, the project will cause the following changes in year​ 1: What is the​ project's free cash flow in year​ 1?

WITHOUT THE PROJECT WITH THE PROJECT

Accounts receivable 43,000 70,000

Inventory 61,000 86,000

Accounts payable 74,000 97,000

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E " ゴWrap Text ta copy ▼ в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Paste Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. Styles ▼ ㆆ ▼ Clipboard LL206 LI Font Alignment Number Cells LK LM LN LO LP LQ LR LS LT LU LV 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 (4くトト1 OCF CASH FLOW STAT N | FCF . FCF = EBIT( 1-t) + DEPRECIATION-INCREASE IN CAPITAL EXPENDITURE-INCREASE IN OPERATING WORKING CAPITAL FCF = EBIT( 1-t) + DEPRECIATION-INCREASE IN CAPITAL EXPENDITURE-(CHANGE IN CURRENT ASSETS-CHANGE IN CURRENT LIABILITIES) FCF = FCF = 455000(1-0.31) 100000 +0(70000+ 86000)- (4300061000)) (97000 74000)) 442950 ARM, MS,confidenceINDEX . CURRENCY . LOAN CROSS OVER HEDGING MONEY MARKET . GM HPR AM , TAX , GROWTH SUST, PREF AND DIV POLICY , erences: EV46 14-01-2019