In: Finance
Taylor Inc. is considering a new project whose data for the first year of operations are shown below. In conducting the capital investment analysis of this project, what would be the project’s Year 1 cash flow?
Sales revenues, each year |
$77,450 |
Depreciation |
$9,562 |
Other operating costs |
$24,499 |
Interest expense |
$8,710 |
Tax rate |
28% |
Sales revenue | $77,450 |
Less: Depreciation | $9,562 |
Less: Other operating costs | $24,499 |
Cash flow before tax | $43,389 |
Less: Tax @ 28% | $12,149 |
Add: Depreciation | $9,562 |
Cash flow after tax | $40,802 |