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Martin Enterprises needs someone to supply it with 1 2 9 , 0 0 0 cartons of machine screws per year to support its manufacturing
Martin Enterprises needs someone to supply it with cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $ to install the equipment necessary to start production; you'll depreciate this cost straightline to zero salvage value over the project's life. You estimate that, in five years, this equipment could be worth $before taxes Your fixed production costs will be $ per year, and your variable production costs should be $ per carton. You also need an initial investment in net working capital of $
Assume your tax rate is percent and you require a return discounting rate of percent on your investment.
Assuming that the price per carton is $ prepare a pro forma income statement.
tableAnnual Net IncomeSalesVariable costs,Fixed costs,DepreciationEBITTaxes Net Income,
What is the operating cash flow OCF
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