1. Rock Haven has a proposed project that will generate sales of 1,935 units annually at a selling price of $37 each. The fixed costs are $20,400 and the variable costs per unit are $11.95. The project requires $37,000 of fixed assets that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. The salvage value of the fixed assets is $9,900 and the tax rate is 21 percent. What is the operating cash flow?

A) $15,382

B) $12,689

C) $24,119

D) $25,446

E) $31,107

2. Power Manufacturing has equipment that it purchased 4 years ago for $3,000,000. The equipment was used for a project that was intended to last for 6 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $490,000 today. The company's tax rate is 21 percent. What is the aftertax salvage value of the equipment?

• $286,000

• $597,100

• $592,000

• $490,000

• $686,000