Recently, You Calculated the Cashflows for the Highfeed Dryer Project

question 18

Essay

Recently, you calculated the cashflows for the Highfeed Dryer project to determine the feasibility of a new feed mix process. Since that time you have now discovered that the calculation of the standard cash flow for Year 1 of $55,000 did not consider the following anticipated changes: account receivable are expected to increase $7,000; cash will rise by $2,000; inventory will increase by $4,000; and account payable are expected to increase $5,000. Determine the new estimated cashflow for Year 1.

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Definitions:

Downward-Sloping Demand

A representation of the relationship between price and quantity demanded, indicating that as price decreases, demand increases.

Reasonable Substitutes

Alternative products or services that can satisfactorily replace others, meeting the same needs or wants.

TC (Total Cost) Curve

A graphical representation that shows the total cost of production at different levels of output.