1. Elle Mae Industries has a cash balance of $51,000, accounts payable of $155,000; inventory of $195,000; accounts receivable of $255,000; notes payable of $211,000; and accrued wages and taxes of $41,000. How much net working capital does the firm need to fund?
2. Consider an asset that costs $220,000 and is depreciated straight-line to zero over its 11-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $27,500.
Required :
If the relevant tax rate is 32 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)