Assume that a new project will annually generate revenues of $2,000,000 and cash expenses (including both fixed

Question:

Assume that a new project will annually generate revenues of $2,000,000 and cash expenses (including both fixed and variable costs) of $800,000, while increasing depreciation by $200,000 per year. In addition, the firm’s tax rate is 34 percent. Calculate the operating cash flows for the new project.