Tully's Tool and Die has the following projections for Year 1 of a capital budgeting project.

Year 1 Incremental Projections:

Sales $400,000

Variable Costs $240,000

Fixed Costs $80,000

Depreciation Expense $40,000

Tax Rate 35%

Calculate the operating cash flow for Year 1. (Show your calculation)

A) $26,000 B) $66,000 C) $40,000 D) $38,200