Explore BrainMass
Share

Annual Operating Cash Flow

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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

© BrainMass Inc. brainmass.com October 25, 2018, 5:54 am ad1c9bdddf
https://brainmass.com/business/cash/annual-operating-cash-flow-439331

Solution Preview

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. ...

Solution Summary

This brief and concise solution, illustrates the required calculations needed to determine the annual operating cash flows for two different scenarios.

$2.19
See Also This Related BrainMass Solution

Calculate the expected annual cash flow income tax considerations.

To open a new store, Ross Tire Company plans to invest $640,000 in equipment expected to have a four-year useful life and no salvage value. Ross expects the new store to generate annual cash revenues of $840,000 and to incur annual cash operating expenses of $520,000. Ross' average income tax rate is 30 percent. The company uses straight-line depreciation.

Required

Determine the expected annual net cash inflow from operations for each of the first four years after Ross opens the new store.

View Full Posting Details