Annual operating cash flow of the project for year 1 = $1,578,000
Calculations:
Year 1 | ||
1 | Project cost | - |
2 | Salvage value | - |
3 | Change in working capital | - |
4 | Sales revenue (260*30000) | 7,800,000.00 |
5 | Variable cost (260*18000) | 4,680,000.00 |
6 | Fixed cost | 1,200,000.00 |
7 | Operating income (4 - 5 - 6) | 1,920,000.00 |
8 | Depreciation (20% of 3900000) | 780,000.00 |
9 | Profit before tax (7-8) | 1,140,000.00 |
10 | Tax @ 30% | 342,000.00 |
11 | Profit after tax (9 - 10) | 798,000.00 |
12 | Operating cash flow (11+8) | 1,578,000.00 |
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