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What are operating cash flows in the first year

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Question - Ken Smith wants to start a deck and fence company. To start the business, Ken plans to invest $70,000 in pick-up trucks and tools. Ken is forecasting that he will build 100 decks in the first year and 120 decks in years 2 and 3. He anticipates that the average deck will be priced at $6,000. Ken estimates that the cost of lumber for the typical deck is $2,000. Ken estimates that rent, office expenses, vehicle expenses, wages and salaries will total $350,000 per year. The corporate tax rate is 30%. What are operating cash flows in the first year? (Assume that depreciation is not tax deductible.)

Reference no: EM133064566

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