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Neko [114]
2 years ago
11

Holiday Shipping Express is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets.

The project is expected to produce annual sales of $75,000 with associated cash costs of $57,000. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 30 percent. What is the operating cash flow for this project
Business
1 answer:
____ [38]2 years ago
7 0

Answer:

the operating cash flow is $17,820

Explanation:

The computation of the operating cash flow is shown below;

Annual depreciation = $87,000 ÷5

= $17,400

Now

Operating cash flow is

= (sales - cash costs - depreciation) × (1 - tax rate) + depreciation expense

= ($75,000 - $57,000 - $17,400) × (1 - 0.3) + $17,400

= $420 + $17,400

= $17,820

hence, the operating cash flow is $17,820

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Answer:

The correct option is D: $8.60

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If we substitute the value of these variables in the equation, we get:

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3 years ago
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Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the ye
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Answer:

Actual overhead= $153,400

Explanation:

Giving the following information:

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Net operating income equals (unit sales - unit sales to break even) × unit contribution margin.

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Real estate professionals utilize the metric known as Net Operating Income, or NOI, to swiftly determine the profitability of a certain venture. After deducting required operational costs, NOI calculates the revenue and profitability of investment real estate property.

Is net operating income the same as profit?

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