What is the projects operating cash flow

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Reference no: EM13894264

Jeans ‘n More currently sells blue jeans and T-shirts. Management is considering adding fleece tops to their inventory to provide a cooler weather option. The tops would sell for $39 each and they expect to sell 6,000 per year. By adding the fleece tops, management feels that they will sell an additional 1,200 pairs of jeans at $45 a pair and 500 fewer T-shirts at $10 each. The variable cost per unit is $20 on the jeans, $4.50 on the T-shirts, and $22 on the fleece tops. The incremental annual depreciation expense related to the fleece top is $32,000 and the incremental annual fixed costs related to the fleece top are $60,000. The tax rate is 35 percent. What is the project’s operating cash flow?

Reference no: EM13894264

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