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 last year of Epiphany's project is closest to ________.
A) $65,750
B) $59,175
C) $49,313
D) $52,600

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 last year of Epiphany's project is closest to ________.
A) $65,750 
B) $59,175 
C) $49,313 
D) $52,600

Quizplus · Accepted Answer

A)
 11ea84dc_f548_29bd_9a63_0de65bac701b_TB1316_00_TB1316_00 Decrease in working capital requirements represents increase in free cash flow.

Epiphany Industries Is Considering a New Capital Budgeting Project That