Question

This year a certain investment project generated revenue of​ $200,000. Other expenses​ (excluding depreciation and interest​ expense) totalled​ $100,000. Depreciation expense was​ $50,000 and interest expense was​ $10,000. The firm faces a tax rate of​ 21%. What is the​ project's afterminustax operating cash flow this​ year?

Answer 1

its 89500

Explanation:

EBIT = 200000-100000-50000=50000

TAX= 50000(0.21)= 10500

OCF= (50000-10500) + 50000= 89500

Answer 2

Operating cash flow= 81,600

Explanation:

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

Sales= 200,000

Other expenses= (100,000)

Depreciation= (50,000)

Interest= (10,000)

EBT= 40,000

Tax= (40,000*0.21)= (8,400)

Depreciation= 50,000

Operating cash flow= 81,600