Answer to Question #186570 in Economics for Jen

Question

A project is expected to generate annual revenues of $296,158. Cash operating costs are equal to 32% of revenues. Depreciation is $36,825 per year. The tax rate is 25%. What is the operating cash flows each year for this project.  Include your answer to the nearest dollar

Answer 1

The operating cash flows are:

$CF = (296,158×(1 - 0.32) + 36,825)×(1 - 0.25) = 178,659.33.$