You work for Athens Inc., and you must estimate the Year 1 operating cash flow for a project with the following data. What is the Year 1 operating cash flow? Sales revenues$15,000
Capital cost allowance$4,000
Cash operating costs$6,000
Tax rate35.0%
A) $7,250
B) $7,431
C) $7,617
D) $7,807

Question

Quizplus · Accepted Answer

Year 1 operating cash flow = Sales revenues - Cash operating costs - Capital cost allowance + (Capital cost allowance * Tax rate)= $15,000 - $6,000 - $4,000 + ($4,000 * 0.35)= $15,000 - $6,000 - $4,000 + $1,400= $7,400

You Work for Athens Inc