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Company Z is analyzing a 5-year project that has an initial cost for fixed assets of $1.6

Company Z is analyzing a 5-year project that has an initial cost for fixed assets of $1.6

Company Z is analyzing a 5-year project that has an initial cost for fixed assets of $1.6 million. This cost will be depreciated on a straight-line basis to a zero book value over the life of the project. At the end of the project, the assets will be worthless. The projected annual sales are $1.1 million and the total fixed and variable costs (including depreciation) are $.96 million. The tax rate is 34 percent. What is the project’s annual operating cash flow?

$412,400

$140,000

$561,200

$78,800

Rosa Parks 08-Nov-2017

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