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Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $147,000 per year. Direct production costs a...

Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $147,000 per year. Direct production costs are $49,000, and the fixed costs of maintaining the lawn mower factory are $19,500 a year. The factory originally cost $0.98 million and is being depreciated for tax purposes over 20 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 25%. (Enter your answer in dollars not in millions.)

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Answer #1

Sales Less Costs Less Fixed costs Less Depreciation EBIT Less Tax@25% Net Income Add Depreciation OCF $ 1 $ $ $ $ $ 147,000.0

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