Reference no: EM132038438

The Stop Shoppe currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $26 each with expected sales of 6,400 tops annually. By adding the fleece tops, management feels the firm will sell an additional 958 pairs of jeans at $15 a pair and 450 fewer T-shirts at $19 each. The variable cost per unit is $10 on the jeans, $12 on the T-shirts, and $16 on the fleece tops. The depreciation expense is $25,000 a year and the fixed costs are $43,000 annually. The tax rate is 38.4 percent. What is the project's operating cash flow?