You have just landed an internship in the CFO's office of Hawkesworth Inc.Your first task is to estimate the Year 1 cash flow for a project with the following data.What is the Year 1 cash flow? $\begin{array}{lr}
\text { Sales revenues } & \$ 13,000 \
\text { Depreciation } & \$ 4,000 \
\text { Other operating costs } & \$ 6,000 \
\text { Tax rate } & 25.0 \%
\end{array}$
A) $6,250
B) $6,406
C) $6,566
D) $6,731
E) $6,899

Question

Quizplus · Accepted Answer

Year 1 cash flow = Sales revenues - Depreciation - Other operating costs - Taxes= $13,000 - $4,000 - $6,000 - (0.25 x $13,000)= $13,000 - $4,000 - $6,000 - $3,250= $6,250

You Have Just Landed an Internship in the CFO's Office