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Author Question: You estimate that if a new 4D computer graphic display product is launched by your firm, revenues ... (Read 56 times)

bobypop

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Question 1

Using the following data, what is the change in net working capital?

AccountChange in Balance
Cash+ $12,000
Accounts Payable+ $21,000
Accrued Liabilities+ $ 6,000
Depreciation+ $10,000
Inventories+ $24,000

◦ -$4,000
◦ -$1,000
◦ +$9,000
◦ +$19.000

Question 2

You estimate that if a new 4D computer graphic display product is launched by your firm, revenues will increase by $3,053 in the first year and 10% each year for the next 3 years. Expenses will be 50% of revenues. Depreciation is computed using MACRS for an asset with a 3-year life and a basis of $7,236. The tax rate is 40%. Compute the second year,s annual cash flows. 

MACRS Depreciation Rates
Year3-Year5-Year
133.33%20.00%
244.45%32.00%

◦ $1,542
◦ $1,881
◦ $2,294
◦ $2,386
◦ $2,974


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Marked as best answer by bobypop on Apr 25, 2021

johnpizzaz

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bobypop

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review


vickybb89

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Reply 3 on: Yesterday
:D TYSM

 

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