Question

You have calculated the pro forma net income for a new project to be $46,050. The incremental taxes are $22,540 and incremental depreciation is $16,600. What is the operating cash flow

Answer 1

The multiple choices are:

A) $46,050 B) $68,590 C) $85,190 D) $29,450 E) $62,650

Option E is the correct option,$62,650

Step-by-step explanation:

The operating cash flow=net income+incremental depreciation

the operating cash flow=$46050+$16,600=$62650

The incremental taxes have already been factored into the computation of the net income, hence it is,it is expected that the depreciation would just be added to the net income in a bid to ascertain operating cash flow of the business