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kurt's kabinets is looking for a project that will require 80,000 and another 20,000 in net working capital the project is expected to produce sells of 138,000 with associated cost of 74,000 the project has a 4 year life the company use straight line depreciation to a zero book value over the life of the project the tax rate is 21% what is the operating cash flow for this project

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abiolataiwo2015

Answer:

$54,760

Explanation:

Calculation to determine the operating cash flow for this project

Operating Cash flow=[$138,000 -$ 704,000 - ($80,000 ÷4)] (1-.21) + $20,000

Operating Cash flow=[$138,000 -$ 74,000 -$20,000] 0.79+ $20,000

Operating Cash flow=($44,000*0.79)+$20,000

Operating Cash flow=$34,760+$20,000

Operating Cash flow=$54,760

Therefore the operating cash flow for this project will be $54,760

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