Question: Operating Cash Flow: Next, we will take what we know about depreciation, and also what we know about EBIT and now put it all together

 Operating Cash Flow: Next, we will take what we know about

Operating Cash Flow: Next, we will take what we know about depreciation, and also what we know about EBIT and now put it all together to calculate operating cash flow Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $127,202, plus installation fees of $14,523 and will generate earning before interest and taxes of $66,382 per year over its 5-year life. The machine will be depreciated on a straight-line basis over its 5-year life to an estimated salvage value of 0. Mystic's marginal tax rate is 0%. Mystic will require $22,974 in NWC if the machine is purchased. Determine the annual cash flow in year 3 if the machine is purchased. round your answer to two decimals QUESTION 6 A project is expected to generate annual revenues of $279,758. Cash operating costs are equal to 45% of revenues. Depreciation is $29,373 per year. The tax rate is 28%. What is the operating cash flows each year for this project. Include your answer to the nearest dollar

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!