Northern Railway is considering a project which will produce annual sales of $975,000 and increase cash expenses by $848,000.If the project is implemented,taxes will increase from $141,000 to $154,000 and depreciation will increase from $194,000 to $272,000.The company is debt-free.What is the amount of the operating cash flow using the top-down approach?
A)$25,000
B)$114,000
C)$157,000
D)$181,000
E)$209,000

Question

Quizplus · Accepted Answer

OCF = $975,000 - $848,000 - ($154,000 - $141,000) = $114,000

Northern Railway Is Considering a Project Which Will Produce Annual