A project will require $450,000 for fixed assets and $58,000 for net working capital. The fixed...

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A project will require $450,000 for fixed assets and $58,000 fornet working capital. The fixed assets will be depreciatedstraight-line to a zero book value over the five-year life of theproject. At the end of the project, the fixed assets will beworthless. The net working capital returns to its original level atthe end of the project. The project is expected to generate annualsales of $875,000 and costs of $640,000. The tax rate is 20 percentand the required rate of return is 15 percent. What is the amountof the annual operating cash flow?

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A project will require $450,000 for fixed assets and $58,000 fornet working capital. The fixed assets will be depreciatedstraight-line to a zero book value over the five-year life of theproject. At the end of the project, the fixed assets will beworthless. The net working capital returns to its original level atthe end of the project. The project is expected to generate annualsales of $875,000 and costs of $640,000. The tax rate is 20 percentand the required rate of return is 15 percent. What is the amountof the annual operating cash flow?