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Amsted, Inc. is considering a project that will increase revenues by $2.5 million, cash operating expenses by $700,000, and depreciation and amortization by $300,000 during 2011. For this project, the firm will purchase $800,000 of equipment during the year while decreasing its inventory by $200,000 (with no corresponding decrease in current liabilities. The marginal tax rate for Amsted is 35 percent. What is this project’s incremental after-tax free cash flow for 2011?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92752624

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