Calculating the operating cash flow

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Question: ABC Company has a proposed project that will generate sales of 472 units annually at a selling price of $206 each. The fixed costs are $7,317 and the variable costs per unit are $45. The project requires $15,124 of equipment that will be depreciated on a straight-line basis to a zero book value over the 7-year life of the project. That is, depreciation each year is $15,124/7. The tax rate is 38 percent. What is the operating cash flow?

Reference no: EM131931325

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