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A cost-cutting project will decrease costs by $64,700 a year. The annual depreciation will be $14,700...

A cost-cutting project will decrease costs by $64,700 a year. The annual depreciation will be $14,700 and the tax rate is 34 percent. What is the operating cash flow for this project?

A.$47,700

B. $42,702

C.$37,702

D.$26,996

E.$17,000

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Answer #1
Decrease in cost 64700
(-) Increase in depreciation 14700
Net decrease in cost 50000
Increase in taxes = Net decrease in cost * Tax% = 50000 * 34% 17000
Net decrease in cost 50000
(-) Increase in taxes 17000
(+) Increase in depreciation 14700
Operating cash flow from this project 47700 Option A
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