If Castle View currently does not have any initial working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Castle View Games would like to invest in a division to develop software for a soon to-be-released video game console. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed estimates (in millions of dollars).

If Castle View currently does not have any initial working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment.

Year 1
Year 2
Year 3
Year 4
Year 5
Cash
6
12
15
15
15
Accounts receivable
21
22
24
24
24
Inventory
5
7
10
12
13
Accounts payable
18
22
24
25
30
Transcribed Image Text:Year 1 Year 2 Year 3 Year 4 Year 5 Cash 6 12 15 15 15 Accounts receivable 21 22 24 24 24 Inventory 5 7 10 12 13 Accounts payable 18 22 24 25 30
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