Question

Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense of $2,520, and interest expense of $1,750. If the tax rate is 35 percent. (Enter your answer as directed, but do not round intermediate calculations.)

Required:

What is the operating cash flow? (Round your answer to the nearest whole number, e.g. 32.)

Operating cash flow

$

Answer 1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS $17,283

Operating cash Flows = EBIT + Depreciation - Tax

	Sales	$34,630.00
-	Costs	$10,340.00
=	Gross Profit	$24,290.00
-	Depreciation	$2,520.00
=	EBIT	$21,770.00
-	Interest Expense	$1,750.00
=	EBT	$20,020.00
-	Tax	$7,007.00
=	EAT	$13,013.00

Hence, Operating Cash Flows = $21,770 + $2,520 - $7007

=$17,283

I hope this solves your doubt.

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