you obtain the following data for year 1: Revenue = $43, variable cost = $30, depreciation = $3, tax rate = 30%. Calculate the operating cash flow for the project for year 1.

A. $13 B. $10 C. $7 D. $16

**EXPERT ANSWER**

**The amount is computed as follows:**

**= Revenue – variable cost – tax expense**

**tax expense is computed as follows:**

**= (Revenue – variable cost – depreciation) x tax rate**

= ($ 43 – $ 30 – $ 3) x 30%

= $ 3

**So, the amount will be as follows:**

= $ 43 – $ 30 – $ 3

**= $ 10**