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You work for Whittenerg Inc., which is considering a new project whose data are shown below....

You work for Whittenerg Inc., which is considering a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues, each year $64,500 Depreciation $8,000 Other operating costs $25,000 Interest expense $8,000 Tax rate 35.0% a. $20,017 b. $20,715 c. $22,577 d. $19,318 e. $23,275

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Expert Solution

INCOME STATEMENT
Particulars Amount ($)
Sales            64,500
Less: Other Operating Costs            25,000
Less: Depreciation Expenses             8,000
Less: Interest Expenses             8,000
Earnings Before Tax (EBT)            23,500
Less: Tax at 35%             8,225
Net Income            15,275
Project's Year 1 cash flow
Project's Year 1 cash flow = Net Income + Depreciation Expenses
Project's Year 1 cash flow = $15,275 + $8,000
Project's Year 1 cash flow = $23,275

jeff jeffy answered 1 year ago
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