FI515 Financial Management Week 5: 11-2 Cairn Communications is trying

FI515 Financial Management
Week 5 Homework

11-2 Operating Cash flow
Cairn Communications is trying to estimate the first-year operating cash flow (at t=1) for a proposed project. The financial staff has collected information:
Projected sales $10 million
Operating costs (not including depreciation) $7 million
Depreciation $2 million
Interest expense $2 million

The company faces a 40% tax rate. What is the project’s operating cash flow for the first year (t=1)?
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