Kurt's Kabinets Is Looking at a Project That Will Require

question 75

Multiple Choice

Kurt's Kabinets is looking at a project that will require $80,000 in fixed assets and another $20,000 in net working capital. The project is expected to produce sales of $110,000 with associated costs of $70,000. The project has a 4-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 35%. What is the operating cash flow for this project?

• A) $7,000
• B) $13,000
• C) $27,000
• D) $33,000
• E) $40,000

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