Houston's Is Considering a Project That Will Produce Incremental Annual

Multiple Choice

Houston's is considering a project that will produce incremental annual sales of $361,000 and increase cash expenses by $198,000. If the project is implemented, taxes will increase from $31,000 to $47,000. The company is debt-free. What is the amount of the operating cash flow using the top-down approach?

A) $172,000
B) $147,000
C) $122,000
D) $138,000
E) $163,000