What is the project free cash flow

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Racing Motors is introducing a new product and has expected change in net operating income of $300,000. Racing Motors has a 34% marginal tax rate. This project will also produce $50,000 of depreciation per year. N addition, this project will cause the following changes:

 

 

Without the Project

With the Project

Accounts Receivable

$33,000

$23,000

Inventory

25,000

40,000

Accounts Payable

50,000

86,000

 

What is the project's free cash flow?

Reference no: EM133067805

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