to use
annual sales figure when evaluating this project? Why?
. Calculating Projected Net Income [LO1] A proposed new investment ha
jected sales of $635,000. Variable costs are 44 percent of sales, and fixed cos
$193,000; depreciation is $54,000. Prepare a pro forma income statement assu
a tax rate of 35 percent. What is the projected net income?
4. Calculating OCF [LO1] Consider the following income statement:
Sales
$713,500
Costs
497,300
Depreciation
87,400
EBIT
?
Taxes (34%)
?
Net income
?
Fill in the missing numbers and then calculate the OCF. What is the depreciation
shield?
5. OCF from Several Approaches [LO1] A proposed new project has projected sal