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Operating cash flow (growing each year, MACRS). Mathews Mining Company is looking at a project that has the following forecasted sales: first-year sales are 6,500

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Operating cash flow (growing each year, MACRS). Mathews Mining Company is looking at a project that has the following forecasted sales: first-year sales are 6,500 units, and sales will grow at 12% over the next four years (a five-year project). The price of the product will start at $125 per unit and will increase each year at 9%. The production costs are expected to be 59% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $1,500,000. It will be depreciated using MACRS, 2 and has a seven-year MACRS lille classification. Fixed costs will be $50,000 per year. Mathews Mining has a tax rate of 35%. What is the operating cash flow for this project over these five years? Year 1 N 3-Year 33.33% 44.45% 14.81% 7.41% 5-Year 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 3 4 5 4 7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45% 10-Year 10.00% 18.00% 14.40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.55% 6.55% 3.28% 6 7 00 8 9 10 11

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