Question

Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $48 each with expected sales of 4,550 tops annually. By adding the fleece tops, management feels the firm will sell an additional 310 pairs of jeans at $60 a pair and 445 fewer T-shirts at $21 each. The variable cost per unit is $31 on the jeans, $11 on the T-shirts, and $26 on the fleece tops. With the new item, the depreciation expense is $28,000 a year and the fixed costs are $78,500 annually. The tax rate is 34 percent. What is the project's operating cash flow?

Answer 1

operational cash flow = total revenue - operating  expenses

operating cash flow =$ 26772.4