Question: Ernie's Electrical is evaluating a project that will increase sales by $150,000 and operating costs by $110,000. The initial investment includes $120,000 for equipment and

Ernie's Electrical is evaluating a project that will increase sales by $150,000 and operating costs by $110,000. The initial investment includes $120,000 for equipment and $30,000 for net working capital. The equipment will be depreciated straight line to a zero book value over the 10-year life of the project. The applicable tax rate is 34 percent. What is the operating cash flow for this project?

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