?(Calculating operating cash flows?) Assume that a new project will annually generate revenues of $ 2...
?(Calculating
operating cash
flows?)
Assume that a new project will annually generate revenues of
$ 2 comma 000 comma 000$2,000,000.
Cash expenses including both fixed and variable costs will be
$ 500 comma 000$500,000?,
and depreciation will increase by
$ 280 comma 000$280,000
per year. In? addition, let's assume that the? firm's marginal tax rate is
3232
percent. Calculate the operating cash flows.
What is the? firm's operating cash? flows?
?$nothing??
?(Round to the nearest? dollar.)
Homework Answers
Operating cash flow = (Sales - Costs) * (1 - Tax rate) + Dereciation * Tax rate
= (2000000 - 500000) * (1 - 0.32) + 280000 * 0.32
= 1109600
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