What is the project operating cash flow

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Reference no: EM131921444

Rick’s Corner currently sells skinny jeans and tank tops. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $50 each with expected sales of 3,800 tops annually. By adding the fleece tops, management feels the firm will sell an additional 195 pairs of jeans at $60 a pair and 325 fewer Tank tops at $19 each. The variable cost per unit is $36 on the jeans, $9 on the Tank tops, and $21 on the fleece tops. With the new item, the depreciation expense is $25,000 a year and the fixed costs are $68,500 annually. The tax rate is 33 percent. What is the project's operating cash flow?

Reference no: EM131921444

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