Tetious dimensions is introducing a new product that is


Tetious Dimensions is introducing a new product that is expected to increase it net operating income by $775,000. Tetious Dimensions has a 21% marginal tax rate. This project will also produce $200,000 of depreciation per year. In addition, this project will cause the following changes:

                                                          Without the Project              With the Project

Accounts Receivable                                $55,000                                  $89,000

Inventory                                                   $100,000                               $180,000

Accounts Payable                                     $70,000                                   $120,000

What is the projects free cash flow for year 1?

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Financial Management: Tetious dimensions is introducing a new product that is
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