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​(Calculating changes in net operating working​ capital)   Duncan Motors is introducing a new product and has...

​(Calculating changes in net operating working​ capital)  

Duncan Motors is introducing a new product and has an expected change in net operating income of ​$280,000. Duncan Motors has a 32 percent marginal tax rate. This project will also produce ​$52,000 of depreciation per year. In​ addition, this project will cause the following changes in year​ 1:

Without the Project / With the Project

Accounts receivable: ​$36,000 ​/ $26,000

Inventory: $21,000 / $37,000

Accounts payable: $52,000 / $91,000

What is the​ project's free cash flow in year​ 1?

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