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Annual Operating Cash Flow

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

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