Question: (Calculating operating cash flows) Gemini Software Inc. has developed a new gaming app that is expected to generate a total revenue of 500,000 by selling

(Calculating operating cash flows) Gemini Software Inc. has developed a new gaming app that is expected to generate a total revenue of £500,000 by selling 100,000 downloads priced at £5 each. The fixed expenses for this gaming app are expected to be £400,000. The firm’s tax rate is 25 percent, and the project is expected to pay a royalty of £8,000 for use of a proprietary programming language. Calculate the additional cashflow generated by the new project. Consider that sales may fluctuate up to 25 percent in either direction.

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