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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: TokyoMex who wrote (5732)11/9/1997 11:56:00 PM
From: Clayleas  Read Replies (1) of 31646
 
TokyoMex,
While the cost on the P/(L) for producing the CD will probably be about $1700 as you have pointed out, I am sure that most of that cost is an amortization of the development cost, which has already been spent. The incremental cash flow to produce the CD, which is what is crucial right now, will probably be on the order of $5 per.

When the 1Q results are announced soon, the level of cash will most likely reflect most of the CD development even though there will probably be no bottom line contribution from the CD.

The difference between P/(L) and cash flow is crucial when analyzing the company's finances. Please let me know if my explanation is not clear or if I have misunderstood you.

Jim
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