Question

Your firm has sales of $220,400, costs of goods sold of $135,000, interest expense of $3,400,...

Your firm has sales of $220,400, costs of goods sold of $135,000, interest expense of $3,400, depreciation expense of $10,500 and a tax rate of 34%. What is your firm's operating cash flow (OCF)?

A) $81,300

B) $49,734

C) $63,504

D) $61,090

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Answer #1
Answer
Calculation of firm's operating cash flow
(Amount in $)
Sales 220400
Less: Cost of goods sold 135000
Gross Profit 85400
Less: Depreciation 10500
Less: Interest 3400
Profit before tax 71500
Less: Tax @ 34% 24310
Profit after tax 47190
Add: Non cash expenses 10500
Add: Interest expense 3400
Operating cash flow 61090 (D is Answer)
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