The Income Statements for Infonext Corporation for 2007 and 2008

question 6

Multiple Choice

The income statements for Infonext Corporation for 2007 and 2008 are provided below:
-Refer to the information above. Assume sales will grow at the same rate as they did last year and that depreciation is expected to increase to $850 and interest expense to $1,370. Also
Assume the tax rate will remain a flat 40% in 2009. Gross plant, property, and equipment is
Expected to increase by 6.8% and will be the only investment cash flow. Infonext's additional
Investment in net working capital is expected to be 2% of the change in sales. Forecast
Infonext's 2009 economic project cash flow.

• A)$3,582
• B)$3,194
• C)$3,626
• D)none of the above