What is the after-tax free-cash flow for year five

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A company invests $50,000 in new machinery, which will be depreciated over five years, using the Straight Line Depreciation. The company did not need to increase Net Working Capital for this machinery. Using this new machinery will increase the operating income (Unlevered Net Income) of the company by $3,600 each year for five years. If the company can sell the used machinery immediately after the end of year 5 for $7,000, what is the after-tax free-cash flow for year five, given a tax rate of 40%? (Answer to the nearest dollar, but do not include a dollar sign in your answer.)

Match each type of cash flow to its timing of a typical project: initial, on-going, and terminal.

Decrease in net working capital

Purchase equipment

Taxes

Sunk Costs

Company XYZ, an all-equity firm, reported incremental revenues (net income) of $376 million for the most recent year. The firm had depreciation expenses of $140 million and capital expenditures of $168 million. The company also had an increase in net working capital of $20 million. What is the free cash flow? Enter your answer in dollars and round to the nearest dollar.

Reference no: EM131558515

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