Question

Your firm has net income of $329 on total sales of $1,340. Costs are $740 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

Net operating cash flow= $459

Explanation:

Giving the following information:

Your firm has net income of $329 on total sales of $1,340. Costs are $740 and depreciation is $130. The tax rate is 30 percent. T

To calculate the operating cash flow, we need to use the following structure:

Sales= 1,340

Costs= (740)

Gross income= 600

Depreciation= (130)

EBIT= 470

Tax= (470*0.3)= (141)

Depreciation= 130

Net operating cash flow= $459