The Dar Petroleum Company Ltd (DPCL) is a company that operates several petrol stations in Dar es Salaam. It is considering the purchase of a new state of the air petrol dispensing machine that will cost Tshs 200 million and is expected to operate for five years, after which time it is not expected to have any value. The investment is expected to generate Tshs 360 million in additional revenues for the firm during each of the five years of the project's life. Due to the expanded sales, DPCL expects to have to expand its investment in accounts receivable by Tshs 60 million and inventories by Tshs 36 million. These investments in working capital will be partially offset by an increase in the firm's accounts payable of Tshs 18 million. It is expected that the increased investment in receivables, inventories and payables will be returned at the end of year five as inventories are sold, receivables are collected, and payables are repaid. The project will also result in cost of goods sold equal to 60% of revenipes while incurring other annual cash operating expenses of Tshs 5 million per year. In addition, the depreciation expense for the machine is Tshs 40 million per year. This depreciation expense is one-fifth of the initial investment of Tshs 200 million where the estimated salvage value is zero at the end of its five-year life. Profits from the investment will be taxed at a 30% tax rate and the firm uses a 20% required rate of return. Required: (a) Calculate the operating cash flow for the project. (b) Assume that the DPCL is reconsidering its petrol dispensing machine investment in. light of a change in its expectations regarding project revenues. The firm's management wants to know the impact of a decrease in expected revenues from Tshs 360 million to Tshs 240 million per year. What would be the project's operating cash flow under the revised revenue estimate? D Focus