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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 $52 each with expected sales of 3,750 tops annually. By adding the fleece tops, management feels the firm will sell an additional 230 pairs of jeans at $62 a pair and 365 fewer T-shirts at $23 each. The variable cost per unit is $30 on the jeans, $14 on the T-shirts, and $26 on the fleece tops. With the new item, the depreciation expense is $32,000 a year and the fixed costs are $67,000 annually. The tax rate is 21 percent. What is the project's operating cash flow?
Multiple Choice
$24,713
$37,487
$28,655
$34,034
$26,630

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