5) Consider Project X which leads to an increase in annual sales by $50,000 and costs...

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5) Consider Project X which leads to an increase in annual sales by $50,000 and costs by $30000. The initial asset cost amoun

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Answer 1

Answer #1

Calculation of annual operating cash flow is shown below
Annual depreciation	150000/10
Annual depreciation	$15,000

Sales revenue	$50,000
Less: Costs	$30,000
Less: Depreciation	$15,000
Income before taxes	$5,000
Less: Taxes @ 25%	$1,250
Net income	$3,750
Add: Depreciation	$15,000
Annual operating cash flow	$18,750

Thus, annual operating cash flow for this project is $18,750

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Answer 2

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5) Consider Project X which leads to an increase in annual sales by $50,000 and costs...

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5) Consider Project X which leads to an increase in annual sales by $50,000 and costs...

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