Answer the given two scenarios:
Scenario 1: A 5-year project is expected to generate revenues of $94800, variable costs of $35200, and fixed costs of $14600. The annual depreciation is $5000 and the tax rate is 33 percent. What is the annual operating cash flow?
- $18,075
- $32,980
- $19,700
- $31,800
- $34,500
Scenario 2: Junior's has a new project in mind that will increase accounts receivable by $24500, increase accounts payable by $23000, increase fixed assets by $37000, and decrease inventory by $6000. What is the amount the firm should use as the initial cash flow attributable to net working capital when it analyzes this project?
- $4,500
- $12,600
- $3,200
- $28,900
- $6,000