Annual Operating Cash Flow
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Answer the following two scenarios:
Scenario One: A 5-year project is expected to generate revenues of $94800, variable costs of $35200, and fixed costs of $14600. The annual depreciation is $5000 and the tax rate is 33 percent. What is the annual operating cash flow?
Answer
$18,075
$32,980
$19,700
$31,800
$34,500
Scenario Two: Junior's has a new project in mind that will increase accounts receivable by $24500, increase accounts payable by $23000, increase fixed assets by $37000, and decrease inventory by $6000. What is the amount the firm should use as the initial cash flow attributable to net working capital when it analyzes this project?
Answer
$4,500
$12,600
$3,200
$28,900
$6,000
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Solution Summary
This brief and concise solution, illustrates the required calculations needed to determine the annual operating cash flows for two different scenarios.
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A 5-year project is expected to generate revenues of $94800, variable costs of $35200, and fixed costs of $14600. The annual depreciation is $5000 and the tax rate is 33 percent. ...
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