A proposed new investment has projected sales of $585,000. Variable costs are 44 percent of sales, and

Question:

A proposed new investment has projected sales of $585,000. Variable costs are 44 percent of sales, and fixed costs are $187,000; depreciation is $51,000. Prepare a pro forma income statement assuming a tax rate of 21 percent. What is the projected net income? Fill in the missing numbers and then calculate the OCF. What is the depreciation tax shield?

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