Ch 12: Homework Problems - Cash Flow Estimation and Risk Analysis Back to Assignment Attempts Keep the Highest/4 3. Problem 12.02 (Project Cash Flow) A-Z 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 deprecated at the time of purchase. The financial staff has collected the following information on the project Sales revenues $25 million Operating costs 22.5 million Interest expense 2 million The company has a 25 tax rate, and its WACC 13% Write out your answers completely. For example, 13 million should be entered as 13,000,000 What is the projects operating cash now for the first year (t-1)7 Round your answer to the nearest dollar N bs. If this project would cannibalize other projects by $1 milion of can now before taxes per year, how would this change your answer to part a? Round your The firm's OCF would now be $ answer to the nearest dollar