What is the operating cash flow (OCF) for year 2 of the restaurant project that White Mountain Shipping should use in its NPV analysis of the project? White Mountain Shipping operates a(n) skating rink. 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 716,300 dollars, relevant variable costs of 270,600 dollars, and relevant depreciation of 83,400 dollars. In addition, White Mountain Shipping would have one source of fixed costs associated with the restaurant project. Yesterday, White Mountain Shipping signed a deal with Blue Eagle Consulting to develop an advertising campaign for use in the restaurant project. The terms of the deal require White Mountain Shipping to pay 28,300 dollars to Blue Eagle Blue Eagle in 2 years from today. The tax rate is 40 percent.

What is the operating cash flow for year 4 of project A that Red Royal Food should use in its NPV analysis of the project? The tax rate is 15 percent. During year 4, project A is expected to have relevant revenue of 79,000 dollars, relevant variable costs of 19,000 dollars, and relevant depreciation of 13,000 dollars. In addition, Red Royal Food would have one source of fixed costs associated with the project A. Yesterday, Red Royal Food signed a deal with Carl Advertising to develop a marketing campaign. The terms of the deal require Red Royal Food to pay Carl Advertising either 26,000 dollars in 4 years if project A is pursued or 17,000 dollars in 4 years if project A is not pursued. Finally, the equipment purchased for the project would be sold in 4 years for an expected after-tax cash flow of 9,000 dollars.

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