Bi-Lo Traders Is Considering a Project That Will Produce Sales

question 1

Multiple Choice

Bi-Lo Traders is considering a project that will produce sales of $28,000 and increase cash expenses by $17,500.If the project is implemented,taxes will increase by $3,000.The additional depreciation expense will be $1,600.An initial cash outlay of $1,400 is required for net working capital.What is the amount of the operating cash flow using the top-down approach?

• A)$4,500
• B)$5,900
• C)$6,100
• D)$7,500
• E)$8,900

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