Chesapeake Yachting Gear is analyzing a proposed project. The company expects to

Question

Chesapeake Yachting Gear is analyzing a proposed project. The company expects to sell 6,000 units, plus or minus 3 percent. The expected variable cost per unit is $11 and the expected fixed costs are $158,000. The fixed and variable cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $68,000. The tax rate is 30 percent. The sales price is estimated at $64 a unit, give or take 2 percent. What is the operating cash flow under the best case scenario?

$86,228

$100,610

$116,440

$137,503

$150,943

$86,228

$100,610

$116,440

$137,503

$150,943

Explanation / Answer

$150,943 Statement showing computations Particulars Amount No of Units Sold = 6000 *1.03            6,180.00 Sales Price = 64*1.02                  65.28 Sales Revenues        403,430.40 Total Costs Less Variable Costs = 6180 *11*.96          65,260.80 Less Fixed Costs = 158,000*.96        151,680.00 Less Depreciation          68,000.00 Total Costs        284,940.80 Income before Tax        118,489.60 Tax @30%          35,546.88 Income after Tax          82,942.72 Add: Depreciation            68,000.00 Operating Cash flow        150,942.72

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.