Jefferson & Sons is evaluating a project that will increase annual sales by $138,000 and annual costs by $94,000. The project will initially require $110,000 in fixed assets that will be depreciated straight-line to a zero book value over the 4-year life of the project. The applicable tax rate is 32 percent. What is the operating cash flow for this project?
A. $11,220
B. $29,920
C. $38,720
D. $46,480
E. $46,620
Ans: C. $38,720
Business
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