A project is expected to generate annual revenues of $119,300, with variable costs of $75,400, and...
A project is expected to generate annual revenues of $119,300,
with variable costs of $75,400, and fixed costs of $15,900. The
annual depreciation is $3,950 and the tax rate is 34 percent. What
is the annual operating cash flow?
Hint: Revenue - FC - VC - Depr. = EBIT. Taxes = EBIT x tax rate.
OCF = EBIT + Depreciation - Taxes (same as chapter 2).
a. $61,143
b. $28,000
c. $19,823
d. $31,950
e. $45,243
THANKS IN ADVANCE!
Homework Answers
| Revenue | 119300 |
| Less:Variable cost | 75400 |
| Less:Fixed cost | 15900 |
| Less:Depreciation | 3950 |
| EBIT | 24050 |
Taxes=EBIT*Tax rate
=24050*34%=$8177
OCF=EBIT+Depreciation-Taxes
=24050+3950-8177
=$19823.
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