QUESTION 32

The Clothing Co. is looking at a project that will require $40,000 in net working capital and $100,000 in fixed assets. The project is expected to produce annual sales of $90,000 with associated costs of $60,000. The project has a 10-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 35 percent. What is the annual operating cash flow for this project? a. -$17,000 b. $19, 500 c. $23,000 d. $33,000 e. $90,000