Question: What is the operating cash flow (OCF) for year 2 of the restaurant project that Red Royal Aviation should use in its NPV analysis of

What is the operating cash flow (OCF) for year 2 of the restaurant project that Red Royal Aviation should use in its NPV analysis of the project? Red Royal Aviation operates a(n) ropes course. The firm is evaluating the restaurant project, which would involve opening a restaurant. During year 2, the restaurant project is expected to have relevant revenue of 940,800 dollars, relevant variable costs of 273,700 dollars, and relevant depreciation of 71,900 dollars. In addition, Red Royal Aviation would have one source of fixed costs associated with the restaurant project. Yesterday, Red Royal Aviation signed a deal with Blue Eagle Consulting to develop an advertising campaign for use in the restaurant project. The terms of the deal require Red Royal Aviation to pay 30,700 dollars to Blue Eagle Blue Eagle in 2 years from today. The tax rate is 10 percent.

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