A nine-year project is expected to generate annual revenues of $137,800,variable costs of $82,600,and fixed costs of $11,000.The annual depreciation is $23,500 and the tax rate is 34 percent.What is the annual operating cash flow?

Question

Quizplus · Accepted Answer

Operating cash flow is calculated as: (Revenues - Variable Costs - Fixed Costs - Depreciation) * (1 - Tax Rate) + Depreciation. Plugging in the values: ($137,800 - $82,600 - $11,000 - $23,500) * (1 - 0.34) + $23,500 = $37,162.

A Nine-Year Project Is Expected to Generate Annual Revenues of $137,800,variable