A New Project Is Expected to Generate $800,000 in Revenues,$250,000

question 155

Multiple Choice

A new project is expected to generate $800,000 in revenues,$250,000 in cash operating expenses,and depreciation expense of $150,000 in each year of its 10-year life.The corporation's tax rate is 35%.The project will require an increase in net working capital of $85,000 in year one and a decrease in net working capital of $75,000 in year ten.What is the free cash flow from the project in year one?

• A) $298,000
• B) $375,000
• C) $380,000
• D) $410,000