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    Capital budgeting Cash flow

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    ABC company is evaluating its first year operating cash flows (at t=1).

    Here is some related information:

    Projected revenues = $1 million
    Operating costs (excluding depreciation)=$0.7 million
    Interest expense = $0.2 million
    Depreciation expense=$0.2 million
    Tax rate=40%

    What is the company's operating cash flow for the first year?

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    Projected Revenues $1,000,000
    Less ...

    Solution Summary

    Calculating Operating Cash Flow for a capital budgeting project are examined.