What is the annual operating cash flow

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Reference no: EM13885343

Colors and More is considering replacing the equipment it uses to produce crayons. The equipment would cost $1.37 million, have a 12-year life, and lower manufacturing costs by an estimated $310,000 a year. The equipment will be depreciated over 12 years using straight-line depreciation to a book value of zero. The required rate of return is 15 percent and the tax rate is 35 percent. What is the annual operating cash flow?

A) $156,947.92

B) $40,211.24

C) $266,441.67

D) $241,458.33

E) $136,709.48

Reference no: EM13885343

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