Jacob's Jewelers Is Considering Carrying a New Product Line Which

question 65

Multiple Choice

Jacob's Jewelers is considering carrying a new product line which is expected to produce annual sales of $450,000 and increase cash expenses by $305,001. If the product line is added, taxes will
Increase by $38,001. The additional depreciation expense will be $36,001. An initial cash outlay of
$65,000 is required for net working capital. What is the amount of the operating cash flow using the
Top-down approach?

• A) $42,000
• B) $71,000
• C) $107,000
• D) $136,000
• E) $172,000

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Definitions:

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