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Problem 11-02 Operating Cash Flow The financial staff of Cairn Communications has identified the following information...

Problem 11-02 Operating Cash Flow

The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service:

Projected sales $25 million

Operating costs (not including depreciation) $11 million

Depreciation $6 million Interest expense $3 million

The company faces a 40% tax rate. What is the project's operating cash flow for the first year (t = 1)? Write out your answer completely. For example, 2 million should be entered as 2,000,000.

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Answer #1

Solution :

The project's operating cash flow for the first year = $ 10,800,000

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

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