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Moving to another question will save this response Question 10 uestion 10 Rock Haven has a proposed project that will generat

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Answer #1

first let us know the annual depreciation:

=> (cost - salvage value) / life

=. (33,400-0) / 4

=>$8,350 per year.

calculation of operating cash flow:

sales (1845*$31) 57,195
less:variable costs (1845*9.55) (17,619.75)
contribution 39,575.25
less:fixed costs (17,400)
less:depreciation (8,350)
income before tax 13,825.25
less: tax @34% (4,700.585)
net income 9,124.665
add: depreciation 8,350
operating cash flow

$17,474.67

(or)

$17,475.. (if rounded off to nearest dollar)

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