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Bad Company has a new 4-year project that will have annual sales of 7,500 units. The price per unit is $19.00 and the variable cost
Bad Company has a new 4-year project that will have annual sales of 7,500 units. The price per unit is $19.00 and the variable cost per unit is $6.75. The project will require fixed assets of $85,000, which will be depreciated on a 3-year MACRS schedule. The annual depreciation percentages are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. Fixed costs are $25,000 per year and the tax rate is 40 percent. What is the operating cash flow for Year 3?
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