Question

A pharmaceutical company has accepted a project that is expected to increase revenues by $200,000 a year and cash expenses by $15,000 a year. The project will require the purchase of some new equipment that will increase depreciation expenses by $25,000 a year. Net working capital is also expected to increase by $4,000 annually. The firm is in the 215 MARGINAL TAX BRACKET. WHAT IS THE CHANGE IN OPERATING CASH FLOWS? 1. $30,250 2. $18,300 3. $40,750 4. $39,500 5. $44,750

Name: a pharmaceutical company has accepted a project that is expected to increase revenues by 200000 a year and cash expenses by 15000 a year the project will require the purchase of some new equ 23124
Uploaded: 2023-12-10T21:02:45-08:00
Duration: 1 min 36 s
Channel: Breanna Ollech
Description: a pharmaceutical company has accepted a project that is expected to increase revenues by 200000 a year and cash expenses by 15000 a year the project will require the purchase of some new equ 23124

          A pharmaceutical company has accepted a project that is expected to increase revenues by $200,000 a year and cash expenses by $15,000 a year. The project will require the purchase of some new equipment that will increase depreciation expenses by $25,000 a year. Net working capital is also expected to increase by $4,000 annually. The firm is in the 215 MARGINAL TAX BRACKET. WHAT IS THE CHANGE IN OPERATING CASH FLOWS?

1. $30,250
2. $18,300
3. $40,750
4. $39,500
5. $44,750

Added by Kimberly A.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Breanna Ollech

12/10/2023

Step 1

215) + $25,000 - $4,000 Operating cash flow = $160,000 * 0.785 + $21,000 Operating cash flow = $125,600 + $21,000 Operating cash flow = $146,600 Show more…

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A pharmaceutical company has accepted a project that is expected to increase revenues by $200,000 a year and cash expenses by $15,000 a year. The project will require the purchase of some new equipment that will increase depreciation expenses by $25,000 a year. Net working capital is also expected to increase by $4,000 annually. The firm is in the 215 MARGINAL TAX BRACKET. WHAT IS THE CHANGE IN OPERATING CASH FLOWS? 1. $30,250 2. $18,300 3. $40,750 4. $39,500 5. $44,750