Homework Answers
Annual Operating Cash Flow Calculation:
| Year (n) | Initial Investments | Depreciation (straight line)D : asset/5 | Annual Sales | Annual expenses | Before taxes cash flow (BTCF) [Annual Sales - Annual Expenses] | Taxable Income (BTCF - depreciation) | Income taxes (Taxable Income *24%) | After Tax Net Income (taxable income - taxes) | Annual Operating Cash Flow = ( Net Income + depreciation) |
| 0 | $5,000,000 | ||||||||
| 1 | $1,000,000 | $4,000,000 | $2,000,000 | $2,000,000 | $1,000,000 | $240,000 | $760,000 | $1,760,000 | |
| 2 | $1,000,000 | $4,000,000 | $2,000,000 | $2,000,000 | $1,000,000 | $240,000 | $760,000 | $1,760,000 | |
| 3 | $1,000,000 | $4,000,000 | $2,000,000 | $2,000,000 | $1,000,000 | $240,000 | $760,000 | $1,760,000 | |
| 4 | $1,000,000 | $4,000,000 | $2,000,000 | $2,000,000 | $1,000,000 | $240,000 | $760,000 | $1,760,000 | |
| 5 | $1,000,000 | $4,000,000 | $2,000,000 | $2,000,000 | $1,000,000 | $240,000 | $760,000 | $1,760,000 |
Annual Operating Cash Flow of the project is $1,760,000 per year
Therefore correct answer is option A. $1,760,000
Formulas used in excel calculation:
![A B с D E G H Before taxes cash flow (BTCF) [Annual Sales - Annual Expenses] Income taxes Taxable income (Taxable income (BTC](http://img.homeworklib.com/questions/79a60170-0b13-11eb-95c9-8df14a85b799.png?x-oss-process=image/resize,w_560)
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