You are currently working for MAC Corp. and you have identified the following information for the first year of the roll-out of its new proposed project:   Projected Revenue  $ 20 Million  Operating costs (does not include depreciation)  $10 Million Depreciation $5 Million Interest Expense $4 Million The firm faces a 30% tax rate.  Assume that there are no changes in net operating working capital.    What is the project’s operating cash flow for the first year ( at end of Year 1 ==> t = 1 ) ?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You are currently working for MAC Corp. and you have identified the following information for the first year of the roll-out of its new proposed project:

 

Projected Revenue  $ 20 Million 
Operating costs (does not include depreciation $10 Million
Depreciation $5 Million
Interest Expense $4 Million


The firm faces a 30% tax rate.  Assume that there are no changes in net operating working capital. 

 

What is the project’s operating cash flow for the first year ( at end of Year 1 ==> t = 1 ) ?

Please show your work. 

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