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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:

I got the information from Apple's Form 10-K reported by the SEC.

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favorable since it increased from $8.35 to $9.27, or 11%

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EPS should increase since the total amount of outstanding shares will decrease. Wen you are calculating a fraction, if the denominator decreases, the value of the fraction increases. Apple has excess cash, so it can afford to buy back shares without affecting its normal operations.

8 0
3 years ago
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