1. You are analyzing the operating cash flow for a proposed project. The equipme

Question

1. You are analyzing the operating cash flow for a proposed project. The equipment has a depreciable life of 6 years; the proposed project life is 8 years. All revenue and operating expenses will remain constant. One analyst says the OCF will remain constant over the 8 year proposed project life. Your boss asks your opinion and you say ____ because _____. A. Yes; the revenue and operating expenses are constant B. No; OCF will change the last two years because of reduced non-cash expenses C. Maybe; cash expenses should be collected for years 7 and 8 changing the OCF

Explanation / Answer

B) maybe; cash expenses should be collected for year 7 and 8 changing the OCF

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