Question

Compute operating cash flows for the following:
a. A project that is expected to have sales of $10,000, expenses of $5,000, depreciation of $200, an investment of $50 in net working capital and a 20 percent tax rate.
b. A project has the simplified project income statement below. In addition, assume that the project requires a $75 investment in net working capital.
Sales................................. $925.00
-Costs............................... -315.00
-Depreciation.................... -100.00
EBIT=EBT......................... 510.00
-Taxes (at 34%).......... -173.40
Net Income......................... 336.60
c. For a capital budgeting proposal, assume this year’s cash sales are forecast to be $220, cash expenses $130, and depreciation $80. Assume the firm is in the 30 percent tax bracket.


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  • CreatedMarch 27, 2015
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