Marie's Fashions Is Considering a Project That Will Require $28,000

question 50

Multiple Choice

Marie's Fashions is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets.The project is expected to produce annual sales of $75,000 with associated cash costs of $57,000.The project has a 5-year life.The company uses straight-line depreciation to a zero book value over the life of the project.The tax rate is 30 percent.What is the operating cash flow for this project?

• A)-$1,520
• B)-$580
• C)$420
• D)$15,680
• E)$17,820