Attempts Average / 2 2. Problem 12.02 (Project Cash Flow) eBook Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information on the project: Sales revenues $15 million Operating costs 12 million Interest expense 1 million. The company has a 25% tax rate, and its WACC is 10%. Write out your answers completely. For example, 13 million should be entered as 13,000,000. a. What is the project's operating cash flow for the first year (t = 1)? Round your answer to the nearest dollar. $ b. If this project would cannibalize other projects by $0.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar. The firm's OCF would now be $

Coisen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fuly depreciated at the Bime of purchase. The financial staff has collected the following information on the project: Sales revenues $15 million Operating costs 12 million Interest expense 1 milion The company has a 25% fax rate, and its wacc is 10%. Write out your answers completely. For example, 13 milion should be entered as 13,000,000. a. What is the orolect's operating cash flow for the first year (t=1) ) Round your ansher to the nearest doliar b. If this projec would cannibalife other projects by s0. 5 miltion of cash fow before tawes per year, how would this change vour antwer to part al Round your answer to the nearest doliar. The firms ocr would now be s