ECO Corp is considering an expansion project that requires an initial fixed asset investment of $5,000,000. The fixed assets will be depreciated over 10 years using straight-line (not MACRS) with no residual value. The project will generate annual sales of $4,500,000, cash costs of $3,400,000 (costs DO NOT include depreciation expense) and the tax rate is 25%.

What is the annual operating cash flow of the project?

You are preparing a discounted free cash flow analysis for PayCo Inc. For year 1 of the projection period PayCo Inc. expects EBITDA of $420,000, depreciation and amortization of $20,000, outstanding debt of $150,000, capital expenditures of $75,000, an increase in working capital of $20,000, 115,000 shares outstanding, cash of $15,000 and a tax rate of 25%.

What would be the free cash flow for PayCo Inc. in Year 1?