Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects: The free cash flow for the first year of Epiphany's project is closest to ________.
A) $45,600
B) $28,500
C) $38,000
D) $53,200

Question

Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:  The free cash flow for the first year of Epiphany's project is closest to ________.
A) $45,600 
B) $28,500 
C) $38,000 
D) $53,200

Quizplus · Accepted Answer

C)
 11ea84dc_f547_db9b_9a63_93fc7166615c_TB1316_00_TB1316_00 Increase in working capital requirements represent decrease in free cash flow.

Epiphany Industries Is Considering a New Capital Budgeting Project That