Question
Ozzy's Textiles is considering offering a new product. This product requires an investment of $124,000 in new fixed assets and $32,750 in net working capital,
Ozzy's Textiles is considering offering a new product. This product requires an investment of $124,000 in new fixed assets and $32,750 in net working capital, all of which are recoverable at the end of the project. The fixed assets will be depreciated straight-line to zero over the 4-year life of the project. The company spent $10,000 to hire a consultant to estimate the potential costs and revenue associated with this project. The consultant projects the product will produce annual sales of $119,000 with annual costs of $78,900. At the end of the project, the company should be able to sell the fixed assets for $25,400. What is the project's operating cash flow?
OCF =
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