Question

A project has annual depreciation of $20,700, costs of $94,700, and sales of $138,500. The applicable tax rate is 34 percent. What is the operating cash flow?

Answer 1

$48,840

Step-by-step explanation:

Given the data above, the operating cash flow is computed as;

= Costs - depreciation

= 94,700 - 20,700

= 74,000

Tax rate 34% × 74,000 = $25,160

Cash flow = 74,000 - 25,260 = 48,840