Shelly's Boutique Is Evaluating a Project Which Will Increase Annual

question 212

Multiple Choice

Shelly's Boutique is evaluating a project which will increase annual sales by $70,000 and annual costs by $40,000. The project will initially require $100,000 in fixed assets which will be depreciated straight-line to a zero book value over the 5-year life of the project. The applicable tax rate is 34%. What is the operating cash flow for this project?

• A) $26,400
• B) $26,600
• C) $30,000
• D) $46,400
• E) $46,600

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