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What is the project operating cash flow

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Question - Lawaki currently sells bula sulu and bula shirts. Lawaki is considering adding bula pants to his range. The bula pants sell for $27 each and he expects to sell 7500 units per year. By adding the bula pants, Lawaki feels that he will sell an additional 800 bula sulu at $30 a pair and 300 fewer bula shirts at $12 each. The variable cost per unit is $14 on the bula sulus, $4.50 on the bula shirts and $16 on the pants. The incremental annual depreciation expense related to the bula pants is $21000 and the incremental annual fixed costs related to the bula pants are $34000. The tax rate is 27%. What is the project's operating cash flow?

Reference no: EM133045920

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