Ridiculousness, Inc., has sales of $44,000, costs of $20,600, depreciation expense of $1,700, and interest expense of $1,000. If the tax rate is 35 percent, what is the operating cash flow, or OCF

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Business

Dayami Bowers

24 July, 17:10

Ridiculousness, Inc., has sales of $44,000, costs of $20,600, depreciation expense of $1,700, and interest expense of $1,000. If the tax rate is 35 percent, what is the operating cash flow, or OCF

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Ulises · Answer 1

Operating cash flow = 15,155

Explanation:

Giving the following information:

Ridiculousness, Inc., has sales of $44,000, costs of $20,600, depreciation expense of $1,700, and interest expense of $1,000.

Tax rate = 35%

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

Sales = 44,000

COGS = (20,600)

Gross profit = 23,400

Depreciation = (1,700)

Interest = (1,000)

EBT = 20,700

Tax = 20,700*0.35 = (7,245)

Depreciation = 1,700

Operating cash flow = 15,155