Organic Produce is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.876 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 32 percent. What is the annual operating cash flow for this project?
depreciation=(5.876*1000000)/6=979333.33
What is the annual operating cash flow for this project
=((5328000-2131200-979333.33)*(1-32%))+979333.33
=2487210.67
the above is answer..
Organic Produce is considering a new 6-year expansion project that requires an initial fixed asset investment...
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