1. Tawanna is considering starting a small business. She plans to purchase equip
ID: 2750484 • Letter: 1
Question
1. Tawanna is considering starting a small business. She plans to purchase equipment costing $149,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $32,400 per year. A market research specialist estimates that Tawanna's annual sales from the business will amount to $96,000. Tawanna plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business?
1. 37,600 2. 58,400 3. 96.000 4. none are correct
Explanation / Answer
Sale revenue $ 96,000 Less: Operating costs $ 32,400 Rent on building $ 26,000 Annual net cash flows generated $ 37,600
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