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The Blue Lagoon Is Considering a Project with a Five-Year

Question 39

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The Blue Lagoon is considering a project with a five-year life.The project requires $32,000 of fixed assets that are classified as five-year property for MACRS.Variable costs equal 67 percent of sales, fixed costs are $12,600, and the tax rate is 34 percent.What is the operating cash flow for Year 4 given the following sales estimates and MACRS depreciation allowance percentages? The Blue Lagoon is considering a project with a five-year life.The project requires $32,000 of fixed assets that are classified as five-year property for MACRS.Variable costs equal 67 percent of sales, fixed costs are $12,600, and the tax rate is 34 percent.What is the operating cash flow for Year 4 given the following sales estimates and MACRS depreciation allowance percentages? A) -$1,806.67 B) $640.89 C) $1,311.16 D) $1,409.80 E) -$2,276.60


A) -$1,806.67
B) $640.89
C) $1,311.16
D) $1,409.80
E) -$2,276.60

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