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Ken Smith wants to start a deck and fence company. To start the business, Ken plans to invest $80,000 in a pick-up truck and tools.
Ken Smith wants to start a deck and fence company. To start the business, Ken plans to invest $80,000 in a pick-up truck and tools. The truck and tools are in Class 43 with a depreciation rate of 30%. Ken is forecasting that he will build 90 decks in the first year and 110 decks in years 2 and 3. He anticipates that the average deck will be priced at $5,500. Ken estimates that the cost of lumber for the typical deck is $2,000. Ken estimates that rent, office expenses, vehicle expenses, wages, and salaries will total $351,400 per year. The corporate tax rate is 30%. What are operating cash flows in the second year of the business? Round your answer to the nearest dollar
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