new project is expected to generate $906,152 in revenues, $352,538 in cash operating expenses, and depreciation expense of $166,547 in each year of its 8-year life. The corporation's tax rate is 34%. The project will require an increase in net working capital of $89,880 at the outset and a decrease in net working capital of $70,745 in year 8. What is the operating free cash flow from the project in the first year, to the nearest dollar?
new project is expected to generate $906,152 in revenues, $352,538 in cash operating expenses, and depreciation expense of $166,547 in each year of its 8-year life. The corporation's tax rate is 34%. The project will require an increase in net working capital of $89,880 at the outset and a decrease in net working capital of $70,745 in year 8. What is the operating free cash flow from the project in the first year, to the nearest dollar?
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 2P
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A new project is expected to generate $906,152 in revenues, $352,538 in cash operating expenses, and depreciation expense of $166,547 in each year of its 8-year life. The corporation's tax rate is 34%. The project will require an increase in net working capital of $89,880 at the outset and a decrease in net working capital of $70,745 in year 8. What is the operating free cash flow from the project in the first year, to the nearest dollar?
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