Operating cash flow for the project
Jefferson and Sons is evaluating a project that will increase annual sales by $138,000 and annual costs by $94,000. The project will initially require $110,000 in fixed assets that will be depreciated straight line to a zero book value over the 4 year life of the project. The applicable tax rate is 32%. What is the operating cash flow for this project?
a. $11,220
b. $29,920
c. $38,720
d. $46,480
e. $48,620