Ronnie's Coffee House Is Considering a Project Which Will Produce

question 15

Multiple Choice

Ronnie's Coffee House is considering a project which will produce sales of $6,000 and increase cash expenses by $2,500. If the project is implemented, taxes will increase by $1,300. The additional depreciation expense will be $1,000. An initial cash outlay of $2,000 is required for net working capital. What is the amount of the operating cash flow using the top-down approach?

• A) $2,000
• B) $1,500
• C) $2,200
• D) $3,500
• E) $4,200

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