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What are your pro forma free cash flows for year

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Reference no: EM133044420

Question - You are evaluating a new product. In year 3 of your analysis, you are projecting pro forma sales of $4.7 million and cost of goods sold of $2.82 million. You will be depreciating a $1.5 million machine for 5 years using straight-line depreciation. Your tax rate is 33%. Finally, you expect working capital to increase from $200,000 in year 2 to $300,000 in year 3.

Required -

A. What are your pro forma earnings for year 3?

B. What are your pro forma free cash flows for year 3?

Reference no: EM133044420

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