ABC Company is considering a new project. The project is expected to generate annual sales of $91,079, variable costs of $26,515, and fixed costs of $12,494. The depreciation expense each year is $17,170 and the tax rate is 37 percent. What is the annual operating cash flow?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
OCF is calculated below:
Calculate annual CF for years 1-10
| Particulars | Remark | Amount |
| Sales | Given | $ 91,079.00 |
| Total Variable cost | Given | $ 26,515.00 |
| Fixed cost | Given | $ 12,494.00 |
| EBITDA | Sales-Total Variable cost-Fixed Cost | $ 52,070.00 |
| Depreciation | Given | $ 17,170.00 |
| EBT | EBITDA-Depreciation | $ 34,900.00 |
| Tax | 37% x EBT | $ 12,913.00 |
| EAT | EBT-Tax | $ 21,987.00 |
| Depreciation | Added back as non cash | $ 17,170.00 |
| OCF | EAT+Depreciation | $ 39,157.00 |
SO the OCF = 39157.00
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