The free cash flow for the last year of Epiphany's project is closest to ________
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:
Year 0 1 2 3
Sales (Revenues) $150,000 $150,000 $150,000
- Cost of Goods Sold (50% of Sales) 75,000 75,000 75,000
- Depreciation 20,000 20,000 20,000
= EBIT 55,000 55,000 55,000
- Taxes (35%) 19,250 19,250 19,250
= unlevered net income 35,750 35,750 35,750
+ Depreciation 20,000 20,000 20,000
+/(-) increase/(decrease) in working capital 5,000 5,000 -10,000
- capital expenditures -$90,000
A) $65,750
B) $59,175
C) $49,313
D) $52,600
Answer: A
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April and other employees of Bodegas & Bistros Inc (2B) maintain a password-protected social media page to "vent about work.". When 2B learns of the page, the company intimidates April into revealing the password, and after reviewing the posts, fires her and the other participants. Most likely, this is
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