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The sports club wants to expand his facility. The expansion will require $438,000 in building improvements that will be depreciated on a straight line basis

The sports club wants to expand his facility. The expansion will require $438,000 in building improvements that will be depreciated on a straight line basis over a 20 year period. The expanded area is expected to generate $203,000 in additional sales. Variable costs are 60% of sales and the annual fixed cost are $13,600. The tax rate is 34%. What is the operating cash flow for the first year of this project?

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