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Find what is value of incremental free cash flow in year

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Reference no: EM132654490

Problem 1) Project Beta is a project which will last for 5 years and which requires an initial outlay of $5,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $3400 per year. The value of incremental, after-tax earnings is $1110 per year. The project will require Net Working Capital equal to 5% of incremental revenue.

What is the value of incremental free cash flow in Year 0?

Select one:

a. $-5170

b. $4830

c. $5170

d. $-4830

Reference no: EM132654490

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