Laurel's Lawn Care Ltd

Finance Nov 20, 2020

Laurel's Lawn Care Ltd., has a new mower line that can generate revenues of $150,000 per year. Direct production costs are $50,000, and the fixed costs of maintaining the lawn mower factory are $20,000 a year. The factory originally cost $1.25 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm's tax bracket is 25%. (Enter your answer in dollars not in millions.)

OPERATING CASH FLOWS=

Expert Solution

So, Operating Cash Flow is $72,500.

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