a proposed new project has projected sales of 125 000 costs of 59 000 and depreciati 595553
A proposed new project has projected sales of $125,000, costs of $59,000 and depreciation of $12,800. The tax rate is 35%. Calculate operating cash flow using the four different approaches described in the chapter and verify that the answer is the same in each case.
4 different approaches:
| Amount | |
| Sales | $125,000 |
| Costs | ($59,000) |
| Depreciation | ($12,800) |
| EBIT (Earnings before interest and tax) | $53,200 |
| Taxes @ 35% of EBIT | ($18,620) |
| Net Income | $34,580 |