The Java House Is Considering a Project That Will Produce

question 21

Multiple Choice

The Java House is considering a project that will produce sales of $59,280 and increase cash expenses by $26,040.If the project is implemented,taxes will increase by $4,600.The additional depreciation expense will be $10,100.An initial cash outlay of $7,300 is required for net working capital.What is the amount of the operating cash flow using the top-down approach?

• A)$18,540
• B)$33,240
• C)$18,200
• D)$28,640
• E)$32,800

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Definitions:

Variable Cost

Expenses that change in proportion to the amount of goods produced or the volume of sales.

Unit Basis

A method or metric used to measure, allocate, or assess something on a per-unit basis, often related to pricing or cost calculations.

Traditional Format

A standard or conventional method of presenting data or information, often used in financial reporting or accounting.

Income Statements

A financial statement that records a company's revenues and expenses over a specific period, showing net profit or loss.