A project will generate before tax cost savings of $110,000 per year, for five years, create additional depreciation expen and result in the following net working capital needs: Time: Accts Rec Inventory Accts Pay 0 100,000 200,000 120,000 1 150,000 300,000 180,000 2...4 150,000 300,000 180,000 The company's marginal tax rate is 30%. What is the project's cash flow in year 1 (t = 1)? 5000

A project will generate before tax cost savings of $110,000 per year, for five years, create additional depreciation expen and result in the following net working capital needs: Time: Accts Rec Inventory Accts Pay 0 100,000 200,000 120,000 1 150,000 300,000 180,000 2...4 150,000 300,000 180,000 The company's marginal tax rate is 30%. What is the project's cash flow in year 1 (t = 1)? 5000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 2P

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