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Your local athletic center is planning a $500,000 expansion to its current facility. This cost will...

Your local athletic center is planning a $500,000 expansion to its current facility. This cost will be depreciated on a straight-line basis over a 20-year period. The expanded area is expected to generate $175,000 in additional annual sales. Variable costs are 32 percent of sales, the annual fixed costs are $40,000, and the tax rate is 21 percent. What is the operating cash flow for the first year of this project? Multiple Choice $62,410.00 $99,260.00 $67,660.00 $42,660.00 $31,450.00

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Answer #1

OCF = $ 67,660.000 ((175000*0.68)-40000) *0.79+(500000/20*0.21)

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