Question
A proposed new project has projected sales of $132,000, costs of $66,000, and depreciation of $13,500. The tax rate is 30 percent. Calculate operating cash
| A proposed new project has projected sales of $132,000, costs of $66,000, and depreciation of $13,500. The tax rate is 30 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.) |
| Approaches | Operating cash flow |
| EBIT + Depreciation - Taxes | $ |
| Top-down | $ |
| Tax-shield | $ |
| Bottom-up | $ |
|
| |
| Is the answer the same in each case? | ||||
|
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Managerial Finance Essentials
Authors: Charles O. Kroncke, Alan E. Grunewald, Erwin Esser Nemmers
2nd Edition
0829901590, 978-0829901597
