Monroe Electronics' Projected Net Income and Free Cash Flows Are

question 7

Multiple Choice

Monroe Electronics' projected net income and free cash flows are given above in thousands of dollars.Monroe expects their net income and increases in net working capital to increase by 6% per year.If Monroe were able to reduce its annual increase in working capital by 15% without affecting any other part of the business adversely,what would be the effect of this reduction on Monroe's value,given a cost of capital of 11%?

• A)an increase of $3000
• B)an increase of $8000
• C)an increase of $12,000
• D)an increase of $24,000
• E)an increase of $258,000

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