Hello,

Wings and More is considering a 3-year project. The straight line depreciation method is applied to all the fixed assets necessary for this project. What is the project operating cash flow in Year 3 Initiinvestment Annual sales Annual operating costs Initial increase in NWC Resale value Tax rate Discount Rate S 300,000 S 1,200,000 S 500,000 S 300,000 S 200,000 30% 10% Year 0 Year 1 Year 2 Year 3 300,000 Initial investment Revenue Operating costs Depreciation EBT 1,200,000 ,200,000 ,200,000 500,000 500,000 500,000 600,000 180,000 420.000 600,000 180,000 420,000 600,000 180,000 420,000 ?? Net Income 520,000 Operating cash flow Net capital Spending 520,000 (300,000) 300,000 (600,000) 300,000 Incremental cash flow 520.000 520,000 $620,000 $420,00o $520,000 $320,00o $720,000