Worst case scenario cash flow question A project with an 8 year life and an...
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Worst case scenario cash flow question
A project with an 8 year life and an initial investment in capital assets of $450,000. Capital assets will be depreciated straight-line to $50,000 over eight years. Fixed costs are $270,000. Variable costs are $8.155 per unit. Sales are estimated at 46,500 units at an average price of $11.99. The estimated ranges of each variable are: sales quantity 15%; sales price 2%; variable cost 10%; and fixed costs 4%. The tax rate is 35%. Under the worst-case scenario, what is the operating cash flow?
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