Logan Hunting Has a Proposed Project That Will Generate Sales

Logan Hunting has a proposed project that will generate sales of 2,200 units annually at a selling price of $29.95 each.The fixed costs are $15,000 and the variable costs per unit are $6.95.The project requires $42,000 of fixed assets that will be depreciated on a straight-line basis to a zero book value over the four-year life of the project.The salvage value of the fixed assets is $5,500 and the tax rate is 21 percent.What is the operating cash flow for Year 4?

A) $ 30,329
B) $ 19,829
C) $ 21,124
D) $ 42,179
E) $ 22,564

Correct Answer:

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