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Sam's Sports Bar wants to expand their facility. The expansion will require $330,000 in building improvements, which will be depreciated on a straight-line basis over
Sam's Sports Bar wants to expand their facility. The expansion will require $330,000 in building improvements, which will be depreciated on a straight-line basis over a 20-year period. The expanded area is expected to generate $120,000 in additional sales of which 60 percent is variable cost. The fixed costs are $10,000 annually and the tax rate is 35 percent. What is the operating cash flow for the first year of this project?
a. | $40,200 | |
b. | $36,895 | |
c. | $30,475 | |
d. | $24,700 | |
e. | $27,025 |
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