(Calculating free cash flows) Spartan Stores is expanding operations with the introduction of a new...
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(Calculating free cash flows) Spartan Stores is expanding operations with the introduction of a new distribution center. Not only will sales increase but investment in inventory will decline due to increased efficiencies in getting inventory to showrooms. As a result of this new distribution center, Spartan expects a change in EBIT of $900,000. Although inventory is expected to drop from $83,000 to $61,000, accounts receivables are expected to climb as a result of increased credit sales from $90,000 to $110,000. In addition, accounts payable are expected to increase from $63,000 to $86,000. This project will also produce $350,000 of bonus depreciation in year 1 and Spartan Stores is in the 33 percent marginal tax rate. What is the project's free cash flow in year 1? CD The project's free cash flow in year 1 is s (Round to the nearest dollar)
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