What is the annual operating cash flow (OCF) for a 10- year project that has...
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Accounting
What is the annual operating cash flow (OCF) for a 10- year project that has annual sales of $400,000 , its variable costs are 80% of sales and has annual fixed costs of $ 130,000. The project requires new equipment at a cost of $ 50,000 and installation costs of $1,000 and a plant that costs $100,000. Depreciation is under the straight line method and the equipment has an estimated life of 10 years and the plant an estimated life of 30 years. The tax rate is 40% and the discounting rate is 10%.
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