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Burke's Corner currently sells blue jeans and T - shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option.

Burke's Corner 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 $55 each with expected sales of 4,200 tops annually. By adding the fleece tops, management feels the firm will sell an additional 275 pairs of jeans at $67 a pair and 410 fewer T-shirts at $28 each. The variable cost per unit is $38 on the jeans, $18 on the T-shirts, and $33 on the fleece tops. With the new item, the depreciation expense is $35,000 a year and the fixed costs are $75,000 annually. The tax rate is 25 percent. What is the project's operating cash flow?
Multiple Choice
$18,894
$24,706
$30,856
$12,744
$14,069

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