A gym owner is considering opening a location on the other side of town. The new facility will cost $1.57 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $579,000 in annual sales. Variable costs are 39 percent of sales, the annual fixed costs are $94,500, and the tax rate is 21 percent. What is the operating cash flow? Multiple Choice $342.400 $286165 $220,850 $118,017 $246,649
A gym owner is considering opening a location on the other side of town. The new facility will cost $1.57 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $579,000 in annual sales. Variable costs are 39 percent of sales, the annual fixed costs are $94,500, and the tax rate is 21 percent. What is the operating cash flow? Multiple Choice $342.400 $286165 $220,850 $118,017 $246,649
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
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