Question

As a member of UA Corporation's financial staff, you must estimate the Year 1 cash flow for a proposed project with the following data. What is the Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Sales revenues, each year $40,000 Depreciation $10,000 Other operating costs $17,000 Interest expense $4,000 Tax rate 35.0%

Answer 1

$15,850

Step-by-step explanation:

Particulars Amount

Sales revenues, each year $40,000

Less : Depreciation $10,000

Less : Other operating costs $17,000

EBIT $13,000

Less : Interest expense $4,000

EBT/PBT $9,000

Less: Tax at 35% $3,150 ($9,000*35%)

PAT $5,850

Add: Depreciation $10,000

Cash flow after taxes $15,850