Question

Bennett Co. has a potential new project that is expected to generate annual revenues of $263,900,...

Bennett Co. has a potential new project that is expected to generate annual revenues of $263,900, with variable costs of $144,800, and fixed costs of $61,900. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $25,500. The annual depreciation is $25,600 and the tax rate is 40 percent. What is the annual operating cash flow?

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Answer #1

Calculate the operating cash flows as follows:

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