(SOLVED) Castle View Games would like to invest in a division to develop software for a soon-to-be-released video game console.

Discipline: Finance

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 1-2)

Paper Format: APA

Pages: 1 Words: 49

Question

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 the following estimates (in millions of dollars):



Year 1

Year 2

Year 3

Year 4

Year 5

1. Cash
5
12
14
14
14
2. Accounts receivable
20
24
24
21
25
3. Inventory
6
7
10
12
13
4. Accounts payable
16
19
25
26
33


(To copy the table below and use in Excel, click on icon in the upper right corner of table.)  

Assuming that Castle View currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Note: Enter decreases as negative numbers.)

The change in working capital for year 1 is ____________$ million.

(Round to the nearest integer.)