What is the projects annual operating cash flow

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Spear's project is expected to generate net annual sales revenue of $6,000,000 at the end of each of the next four years. The new equipment costs a total amount of $4,000,000. Total operating osts are expected to equal $4,000,000. Suppose the firm uses the straight-line method to depreciate the equipment over four years and the firm's tax rate is 40%, what is the project's annual operating cash flow?

 

A) $200,000 B) $600,000 C) $1,000,000 D) $1,600,000 E) $2,000,000

Reference no: EM13813833

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