Question

Burns Industries has total sales of $258,232 and costs of $146,520 (Note: costs do not include depreciation expense). Depreciation expense is $37,040 and the tax rate is 29 percent. The firm does not have any interest expense. What is the operating cash flow (OCF)

Answer 1

Answer:

$90,057

Explanation:

Sales $258,232

Less: Costs

($146,520)

Depreciation

($37,040)

Operating income

$74,672

Less Tax

($21,655)

Net income

$53,017

Operating cash flow = Net income + Non cash expenses - increase in working capital

= $53,017 + $37,040 - 0

= $90,057