Question

Your firm has net income of $371 on total sales of $1,460. Costs are $800 and depreciation is $130. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow

Answer 1

Operating cash flow = $501

Step-by-step explanation:

Given:

Total sales = $1,460

Total cost = $800

Depreciation = $130

Tax rate = 30% = 0.30

Find:

Operating cash flow

Computation:

Earning Before Interest and Tax = $1,460 - $800 - $130

Earning Before Interest and Tax = $530

Tax = Tax rate x $530

Tax = 0.30 x $530

Tax =$159

Operating cash flow = $530 + $130 - $159

Operating cash flow = $501