Estimated salesSales Price per canCost per canEstimated lifeFixed costsTax rateInitial equipment costInitial equipment cost will be linearly depreciated over 4 year life with $10,000salvage valueInvestment in NWC50,000 cans$6.00$3.004 years$10,000/year$100,050$196,500$116,000$153,200$90,000Cost of capitalWhat is the operating cash flow?$20,00020%10%

Operating cash flow reflects the cash generated by a company from a company's core business…

Answered: What is the operating cash flow?

Business

Accounting

What is the operating cash flow?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 2P

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Question

Estimated sales
Sales Price per can
Cost per can
Estimated life
Fixed costs
Tax rate
Initial equipment cost
Initial equipment cost will be linearly depreciated over 4 year life with $10,000
salvage value
Investment in NWC
50,000 cans
$6.00
$3.00
4 years
$10,000/year
$100,050
$196,500
$116,000
$153,200
$90,000
Cost of capital
What is the operating cash flow?
$20,000
20%
10%

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