A gym owner is considering opening a location on the other side of town. The new facility will cost $1.57 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $579,000 in annual sales. Variable costs are 39 percent of sales, the annual fixed costs are $94,500, and the tax rate is 35 percent. What is the operating cash flow?

Multiple Choice

• $286,165

• $342,400

• $195,624

• $246,649

• $118,017