11 A new project you are reviewing will generate an operating cash flow of $62,000 The project will free up $47,900 in net working capital Initially, $187,500 will be needed for fixed asset purchases What is the total cash flow for this project at time zero $84,900 $62,000 $139,600 $77,600 $125,500 12 The Stop Shoppe 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 $26 each with expected sales of 6,500 tops annually By adding the fleece tops, management feels the firm will sell an additional 979 pairs of jeans at $16 a pair and 497 fewer T shirts at $20 each The variable cost per unit is $9 on the jeans, $11 on the T shirts, and $19 on the fleece tops The depreciation expense is $23,000 a year and the fixed costs are $42,000 annually The tax rate is 38 6 percent What is the project's operating cash flow

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 05, 2024

11. A new project you are reviewing will generate an operating cash flow of $62,000. The project will free up $47,900 in net working capital.

11. A new project you are reviewing will generate an operating cash flow of $62,000. The project will free up $47,900 in net working capital. Initially, $187,500 will be needed for fixed asset purchases. What is the total cash flow for this project at time zero?

		-$84,900
		-$62,000
		-$139,600
		-$77,600
		-$125,500 12. The Stop Shoppe 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 $26 each with expected sales of 6,500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 979 pairs of jeans at $16 a pair and 497 fewer T-shirts at $20 each. The variable cost per unit is $9 on the jeans, $11 on the T-shirts, and $19 on the fleece tops. The depreciation expense is $23,000 a year and the fixed costs are $42,000 annually. The tax rate is 38.6 percent. What is the project's operating cash flow?