Paddleboards Inc. has developed a new, lighter paddleboard that has a 5-year life expectancy. The project will require an initial investment of $91,000 that will be depreciated straight line to zero over the life of the product. The product can be sold for $35.00/unit with a manufacturing cost of $13.00/unit; any additional costs are fixed costs in amount of $22,000 per year (excluding depreciation). The firm expects to sell 8,900 units of the product per year. What is the annual cash flow from operations? Assume a required rate of return of 11.00% and a corporate tax rate of 30%.

a.

$108,920

b.

$139,860

c.

$127,120

d.

$114,380

e.

$121,660