What is relevant operating cash flow

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Reference no: EM132020843

Fairfax Paint operates stores in Virginia. The firm is evaluating the Vienna project, which would involve opening a new store in Vienna. During year 1, Fairfax Paint would have total revenue of 334,000 dollars and total costs of 280,000 dollars if it pursues the Vienna project, and the firm would have total revenue of 274,000 dollars and total costs of 241,000 if it does not pursue the Vienna project. Depreciation taken by the firm would be 67,000 dollars if the firm pursues the project and 47,000 dollars if the firm does not pursue the project. The tax rate is 20 percent. What is the relevant operating cash flow (OCF) for year 1 of the Vienna project that Fairfax Paint should use in its NPV analysis of the Vienna project?

Reference no: EM132020843

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