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The financial staff of Cairn Communications has identified the following information for the first year of...

The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service:

Projected sales $24 million
Operating costs (not including depreciation) $9 million
Depreciation $5 million
Interest expense $5 million

The company faces a 30% tax rate. What is the project's operating cash flow for the first year (t = 1)? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Round your answer to the nearest dollar.

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Answer #1

Operating cash flow= Operating cash flow = $ 12,000,000 (24000000-9000000) *0.7+(5000000*0.3) $12,00,000

> This answer is correct! Out of over 10 similar questions on this site with all incorrect answers, this is the only one that uses the correct formula for the problem.

Frank Abagnale Sun, Dec 5, 2021 7:16 PM

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