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Suppose that you are the owner of a hypothetical firm that has a two-day life and...

Suppose that you are the owner of a hypothetical firm that has a two-day life and sells water on the beach. You hire labor for $50 per day. You want $1,000 in inventory at the beginning of each day and to sell your entire inventory for $2,000 revenue daily. Your supplier allows you to charge 50% of your inventory for each day (i.e., create an account payable equal to 50% of inventory that is due at the end of the day). Assuming a 20% tax rate, what is your firm's day 2 free cash flow?

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