What is the free cash flow of the project


Visible Fences is introducing a new product and has an unexpected change in net operating income of $875,000. Visible Fences has a 33% marginal tax rate. This project will also produce $280,000 of depreciation per year In addition this project will cause the following changes in year

  • Without project With Project
  • Accounts Receivable 52000 66000
  • Inventory 57000 68000
  • Accounts Payable 92000 108000

What is the free cash flow of the project in year 1?

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Accounting Basics: What is the free cash flow of the project
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