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Go fly a kite is considering making and selling custom kites in two sizes. The small...

Go fly a kite is considering making and selling custom kites in two sizes. The small kites would be priced at $11.60 and the large kites would be $24.60. The variable cost per unit is $5.60 and $12.20, respectively. Jill, the owner, feels that she can sell 3150 of the small kites and 1865 of the large kites each year. The fixed costs would be $2120 a year and the depreciation expense is $1450. The tax rate is 40 percent. What is the annual operating cash flow?

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Expert Solution

Solution :

The annual operating cash flow = $ 24,523.60

= $ 24,524 ( when rounded off to the nearest whole number )

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 5 months ago
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