SpaceTech Is Considering a New Project with the Following Projections

question 91

Multiple Choice

SpaceTech is considering a new project with the following projections for Year 2. Year 2 Projections
EBIT $400,000
Interest Expense $20,000
Depreciation Expense $40,000
Tax Rate 40%
Incremental Net Working
Capital Needs $200,000
Compute the operating cash flow for year 2.

• A) $80,000
• B) $180,000
• C) $240,000
• D) $280,000

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Definitions:

Spitting

The act of forcibly ejecting saliva or other substances from the mouth.

Gagging

A reflexive action of the throat to prevent choking, which can be triggered by a variety of causes including the presence of a foreign object in the back of the mouth.

Palmar Reflex

An involuntary response seen in infants, wherein they grasp an object placed in the palm of their hand.

Grasping Reflex

Grasping objects that touch the palms.