A project has annual depreciation of $16,200,costs of $87,100,and sales of $123,000.The applicable tax rate is 40 percent.What is the operating cash flow according to the tax shield approach?

Name: A project has annual depreciation of $16,200,costs of $87,100,and sales of $123,000.The applicable tax rate is 40 percent.What is the operating cash flow according to the tax shield approach?
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Question

Quizplus · Accepted Answer

Operating cash flow = ($123,000 - $87,100) × (1 - 0.40) + ($16,200 × 0.40) = $28,020

A Project Has Annual Depreciation of $16,200,costs of $87,100,and Sales