Arlow Systems is evaluating a proposed new investment with projected sales of $720,000. Variable costs are 52% of sales, and fixed costs are $108,000. Depreciation is $76,000. Prepare a pro forma income statement assuming a tax rate of 40%. What is the projected net income? What is the operating cash flow?

Arlow Systems is evaluating a proposed new investment with projected sales of $720,000. Variable costs are 52% of sales, and fixed costs are $108,000. Depreciation is $76,000. Prepare a pro forma income statement assuming a tax rate of 40%. What is the projected net income? What is the operating cash flow?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 7P: Your division is considering two investment projects, each of which requires an up-front expenditure...

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