Question

A project has annual depreciation of $22,700, costs of $97,700, and sales of $143,500. The applicable tax rate is 40 percent. What is the operating cash flow

Answer 1

Answer:

$45,000

Explanation:

Please see the computation of cash flow below.

= Costs - Depreciation

= $97,700 - $22,700

= $75,000

Tax rate = 40% × $75,000 = $30,000

Cash flow = $75,000 - $30,000 = $45,000

Therefore, operating cash flow is $45,000