You are analyzing a project and have established the following estimates for the first year of a project: Tax rate: 33%...
You are analyzing a project and have established the following estimates for the first year of a project:
Tax rate: 33%
Annual Interest: $3,500
Annual Depreciation Expense: 3,128
Annual Sales in units: 1,854
Price per unit: $17
Variable cost per unit: $9
Fixed costs: $7,194
Calculate the year 1 operating cash flow.
Enter your answer in dollars and cents (i.e. 12.34) Do not enter the dollar sign or commas.
Precede negative answers with the minus sign.
Homework Answers
| Ans. | Particulars | Amount |
| Sales | 31518.00 | |
| Less: Variable Cost | -16686.00 | |
| Contribution margin | 14832.00 | |
| Less: Fixed Cost | -7194.00 | |
| Earning before interest, tax & depreciation | 7638.00 | |
| Less: Depreciation | -3128.00 | |
| Earning before interest & tax | 4510.00 | |
| Less: Interest | -3500.00 | |
| Earnings before taxes | 1010.00 | |
| Less: Tax @ 33% | -333.30 | |
| Net income | 676.70 | |
| Add: Depreciation | 3128.00 | |
| Operating Cash Flow | 3804.70 | |
| *Sales = Annual sales in units * Price per unit | ||
| 1,854 * $17 | ||
| $31,518 | ||
| *Variable cost = Annual sales in units * Variable cost per unit | ||
| 1,854 * $9 | ||
| $16,686 | ||
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