Answer:
a. $30,258
Explanation:
Net income = (sales - operation cost - depreciation)*(1 - tax rate)
cash flow = net income + Depreciation
depreciation = 33%*65000
= 21,450
Net income = (60,000 - 25000 - 21450)*(1 - 0.35)
= 8807.5
Cash flow = 8807.5 + 21450
= $30,257.5
therefore, The Year 1 cash flow is $30,257.5