---
title: "After-tax operating cash flow"
course: "FINC 160 · How money and markets work"
unit: "Making the investment call: evaluate projects"
lesson: 10 of 41
source: https://open.maestrocollege.edu/how-money-and-markets-work/after-tax-operating-cash-flow
publisher: Maestro College
---

# After-tax operating cash flow

Lesson 10 of 41 in **How money and markets work** (FINC 160), unit "Making the investment call: evaluate projects". An open lesson from Maestro College.

## What the learner will be able to do
- Calculate one year's after-tax operating cash flow from revenue, cash costs, depreciation and a tax rate
- Identify the depreciation tax shield: depreciation is not a cash flow itself, but it raises after-tax cash flow by lowering taxes

## Teaching notes
Stands outside the Venture value model arc; use one year of the Option A defaults (revenue $45,000, cash costs $25,000, depreciation $12,000, 25% tax), which give after-tax operating cash flow of $18,000 including a $3,000 depreciation tax shield. Name the apparent reversal from Unit 1 directly: depreciation is still not cash, but once taxes apply it lowers the tax bill, so it now changes cash flow.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 10 complete: After-tax operating cash flow."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Building project cash flows" (lesson 11 of 41), and give the learner its link: https://open.maestrocollege.edu/how-money-and-markets-work/building-project-cash-flows.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Incremental project cash flows
Next lesson: Building project cash flows