1.Libby just expanded her restaurant. She projects revenue will reach $35,000 for the new restaurant in the first year and increase by 25% over the next three years. Expenses are 75% of sales. The initial cost of the new restaurant is $40,000 (depreciable over 7 years using MACRS) and her tax rate is 21%. What are annual cash flows for year 1, year 2, and year 3?

2. How are taxes and depreciation handled differently when calculating operating cash flows?

Answer rating: 100% (QA)

1 To calculate the annual cash flows for years 1 2 and 3 we need to consider the revenue expenses depreciation and taxes Given information Year 1 reve... View the full answer