15. You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.4 million and cost of goods sold of $3.24 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $305,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3?**round to the nearest dollar** You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.4 million and cost of goods sold of $3.24 million. You will be22 depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 inyear 2 to $305,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3?itteHEEEIyⓇComplete the following pro forma statement. (Round to the nearest dollar.)Pro FormaYear 3Off ASales$est fCOGSDepreciationies (EBIT-THTaxEarningsW onDepreciationNet working capitalbeenFree cash flows4ends.00-ave your accRace Changeaccount you45% Off.EIS RUNNINGJay at your comticket podiumd More It's been8149962085 Estof money transfehment Money crea

In the question all figures are direct only depreciation amount needs to be calculated as per…

Answered: You are evaluating a new product. In…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 7P

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15. You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.4 million and cost of goods sold of $3.24 million. You will be depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in year 2 to $305,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3? **round to the nearest dollar**

You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $5.4 million and cost of goods sold of $3.24 million. You will be
22 depreciating a $1 million machine for 5 years using straight-line depreciation. Your tax rate is 38%. Finally, you expect working capital to increase from $200,000 in
year 2 to $305,000 in year 3. What are your pro forma earnings for year 3? What are your pro forma free cash flows for year 3?
itte
HEEEI
yⓇ
Complete the following pro forma statement. (Round to the nearest dollar.)
Pro Forma
Year 3
Off A
Sales
$
est f
COGS
Depreciation
ies (
EBIT
-TH
Tax
Earnings
W on
Depreciation
Net working capital
been
Free cash flows
4
ends
.00-
ave your acc
Race Change
account you
45% Off.
EIS RUNNING
Jay at your com
ticket podium
d More It's been
8149962085 Est
of money transfe
hment Money crea

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