part 2 #4

Laurels Lawn Care, Ltd., has a new mower line that can generate revenues of $132,000 per year. Direct production costs are $44,000, and the fixed costs of maintaining the lawn mower factory are $17,000 a year. The factory originally cost $1.1 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the operating cash flows of the project if the firms tax bracket is 40%.

WHAT IS OPERATING CASH FLOWS?