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Simon Medical Supplies Inc. is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets. The project is expected
Simon Medical Supplies Inc. is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets. The project is expected to produce annual sales of $75,000 with associated costs of $57,000. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 30 percent. What is the annual operating cash flow for this project?
A. -$1,520 B. -$580 C. $420 D. $15,680 E. $17,820
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