Question

A cost-cutting project will decrease costs by $66,100 a year. The annual depreciation will be $15,750 and the tax rate is 35 percent. What is the operating cash flow for this project?

Answer 1

$48,478

Step-by-step explanation:

Calculation to determine What is the operating cash flow for this project

Operating cash flow = [$66,100 ×(1 -.35)] + [$15,750 ×.35]

Operating cash flow = [$66,100 ×.65)+5,513.

Operating cash flow = 42,965+5,513

Operating cash flow = $48,478

Therefore the operating cash flow for this project will be $48,478