​(Calculating free cash flows​) Spartan Stores is expanding operations with the introduction of a new distribution cente

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answerhappygod
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​(Calculating free cash flows​) Spartan Stores is expanding operations with the introduction of a new distribution cente

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​(Calculating free cash flows​) Spartan Stores is expanding
operations with the introduction of a new distribution center. Not
only will sales increase but investment in inventory will decline
due to increased efficiencies in getting inventory to showrooms. As
a result of this new distribution​ center, Spartan expects a change
in EBIT of ​$980,000. Although inventory is expected to drop from
​$82,000 to ​$​69,000, accounts receivables are expected to climb
as a result of increased credit sales from ​$87,000 to ​$160,000.
In​ addition, accounts payable are expected to increase from
​$65,000 to ​$81,000. This project will also produce ​$200,000 of
bonus depreciation in year 1 and Spartan Stores is in the 31
percent marginal tax rate. What is the​ project's free cash flow in
year​ 1?
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