Question: Cleaning Solutions is considering a project that will generate 1,050 additional units of sales annually. The project's annual fixed costs are $10,250 and the variable
Cleaning Solutions is considering a project that will generate 1,050 additional units of sales annually. The project's annual fixed costs are $10,250 and the variable costs per unit are $17. Each unit can be sold for $25. The project requires $37,500 of fixed assets that will be depreciated on a straight-line basis to a zero book value over the 5-year life of the project. At the end of the project, the fixed asset can be salvaged for $8,750. The company faces a tax rate of 21 percent. What is the operating cash flow? $866.78 $113.50 $1,379.69 $353.87
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
