Ernie's Electrical Is Evaluating a Project That Will Increase Sales

question 73

Multiple Choice

Ernie's Electrical is evaluating a project that will increase sales by $48,000 and costs by $16,000.The project will initially cost $89,000 for fixed assets that will be depreciated straight-line to a zero book value over the 6-year life of the project.The applicable tax rate is 34 percent.What is the project's annual operating cash flow?

• A)$23,300.13
• B)$21,450.87
• C)$26,163.33
• D)$22,406.67
• E)$18,180.09