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You Work for Athens Inc A)$7,250
B)$7,431
C)$7,617
D)$7,807

question 36

Multiple Choice

You work for Athens Inc.,and you must estimate the Year 1 operating cash flow for a project with the following data.What is the Year 1 operating cash flow?  Sales revenues $15,000 Capital cost allowance $4,000 Cash operating costs $6,000 Tax rate 35.0%\begin{array}{lc}\text { Sales revenues } & \$ 15,000 \\\text { Capital cost allowance } & \$ 4,000 \\\text { Cash operating costs } & \$ 6,000 \\\text { Tax rate } & 35.0 \%\end{array}


Definitions:

Payback Period

The amount of time it takes for an investment to generate enough cash flow to recoup its original cost.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specified period.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

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