Question

As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Sales revenues $11,900 Operating costs $6,000 Tax rate 25.0%

Answer 1

Answer:

answer is a

Explanation:

Answer 2

Cashflow of year 1 is $4,425.

What is cashflow in a business?

It refers to net cash and  cash equivalents a company has, i.e. all the cash inflow minus the cash outflow. Cash inflow means cash received and cash outflow means cash paid.

Given:

Sales revenues= $11,900

Operating costs=$6,000

Tax rate=25%

Cashflow of year 1= Sales revenues - Operating costs (1-tax rate)

=$11,900-$6,000 (1-0.25)

=$4,425

Therefore, the cashflow of year 1 is $4,425

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