7. You are given the following data for year 1: revenue = 100, fixed cost = 40, including depreciation of 10, total variable cost = 50, tax rate 30%. Calculate the after tax cash flow for the project for year 1:

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7. You are given the following data for year 1: revenue = 100, fixed cost = 40, including depreciation of 10, total variable cost = 50, tax rate 30%. Calculate the after tax cash flow for the project for year 1:

EXPERT ANSWER

Revenue                      100

Less: Variable Cost         50

Contribution                    50

Less: Fixed cost             40

Profit before tax             10

Less: Tax @ 30 %           3

Profit after tax                 7

Add: Depreciation         10

After tax cash flow 17