"11-4. (Calculating free cash flows) Spartan Stores"…Complete Solution! Thanks
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(Calculating free cash flows) Spartan Stores is expanding operations with the introduction of a new distribution center. Not only will sales increase, but investment in inventory will decline due to increased efficiencies in getting inventory to showrooms. As a result of this new distribution center, Spartan expects a change in EBIT of $900,000. While inventory is expected to drop from $90,000 to $70,000, accounts receivables are expected to climb as a result of increased credit sales from $80,000 to $110,000. In addition, accounts payable are expected to increase from $65,000 to $80,000. This project will also produce $300,000 of depreciation per year and Spartan Stores is in the 34 percent marginal tax rate. What is the projects free cash flow in year 1?
[Solved] "11-4. (Calculating free cash flows) Spartan Stores"…Complete Solution! Thanks
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- Submitted On 09 Aug, 2016 02:45:17
- AssignmentExprt
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- Questions : 3
- Solutions : 2097
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"11-4. (Calculating free cash flows) Spartan Stores"…Complete Solution! Thanks
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