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The Garden Mart is analyzing a proposed 3-year project. Expected sales are 16,000 units, +6 percent. The expected variable cost per unit is $4, and
The Garden Mart is analyzing a proposed 3-year project. Expected sales are 16,000 units, +6 percent. The expected variable cost per unit is $4, and the expected fixed costs are $16,000. The fixed and variable cost estimates have a range of 11 percent. The sales price is estimated at $15 a unit, +3 percent. The project requires an initial investment of $41,000 for equipment that will be depreciated using the straight-line method to zero over the project's life. The equipment can be sold for $12,000 at the end of the project. The project requires $5,600 in net working capital. The discount rate is 16 percent, and the tax rate is 35 percent. What is the operating cash flow (OCF) under the optimistic case scenario? Multiple Choice $120.063.17 $121.153.09 $122,694.40 $118.542.27 $117,947.60
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