What is the amount of the operating cash flow

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1. Uptown Motors is analyzing a project with annual sales of $420,000, straight-line depreciation of $28,700 a year, and a net working capital requirement of $34,000. The firm has a tax rate of 34 percent and a profit margin of 6.1 percent. The firm has no long-term debt. What is the amount of the operating cash flow?

O $50,616.67

O $26,667.20

O $54,320.00

O $58,340.70

O $24,384.42

2. A 6-year project has expected sales of 2,000 units, ±4 percent. The expected variable cost per unit is $8, and the expected fixed costs are $9,800. The fixed and variable cost estimates are considered accurate within a range of ±2 percent. The sales price is estimated at $22 a unit, ±3 percent. The project requires an initial investment of $42,000 for equipment that will be depreciated straight-line to zero over the project's life. The equipment has a pretax salvage value of $5,000 at the end of the project. The project requires $2,600 in net working capital during its life. The discount rate is 9 percent, and tax rate is 30 percent. What is the net present value for the optimistic scenario?

O $22,295.33

O $31,490.07

O $34,008.12

O $28,008.46

O $35,096.52

Reference no: EM132005764

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