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Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): - Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in net working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The increase in net working capital for year 1 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 2 is 5million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 3 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 4 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 5 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 1 Year 1 2 3 4 5 2 Cash 6 10 14 14 15 3 Accounts Receivable 21 22 24 23 25 4 Inventory 4 8 10 12 13 Accounts Payable 18 20 25 29 35 Print Done

Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): - Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in net working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The increase in net working capital for year 1 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 2 is 5million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 3 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 4 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 5 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 1 Year 1 2 3 4 5 2 Cash 6 10 14 14 15 3 Accounts Receivable 21 22 24 23 25 4 Inventory 4 8 10 12 13 Accounts Payable 18 20 25 29 35 Print Done

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 4P
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Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): - Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in net working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The increase in net working capital for year 1 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 2 is 5million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 3 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 4 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 5 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 1 Year 1 2 3 4 5 2 Cash 6 10 14 14 15 3 Accounts Receivable 21 22 24 23 25 4 Inventory 4 8 10 12 13 Accounts Payable 18 20 25 29 35 Print Done
Transcribed Image Text:Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): - Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in net working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.) The increase in net working capital for year 1 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 2 is 5million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 3 is $ million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 4 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) The increase in net working capital for year 5 is $million. (Round to the nearest integer. Enter increases as negative numbers and decreases as positive numbers.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 1 Year 1 2 3 4 5 2 Cash 6 10 14 14 15 3 Accounts Receivable 21 22 24 23 25 4 Inventory 4 8 10 12 13 Accounts Payable 18 20 25 29 35 Print Done
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