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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