Question

During 2019, Stark Industries had a sales revenue of $100,000, and a total cost before depreciation,...

During 2019, Stark Industries had a sales revenue of $100,000, and a total cost before depreciation, interest, and taxes of 40,000. The company had accumulated depreciation of $2,000 at the end of 2019 and $1,000 at the end of 2018. Stark Industries is subject to a 21% marginal tax rate. What was the operating cash flow for Stark Industries?

Select one:

a. $48,400

b. $32,600

c. $47,610

d. $47,820

e. $49,400

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Homework Answers

Answer #1
Sales           100,000.00
Less cost             40,000.00
Profit before tax             60,000.00
Less Tax @21%             12,600.00
Profit after tax             47,400.00
Add Depreciation for current year                1,000.00
( 2000 - 1000)
Operating cash flow             48,400.00

Answer option A ) $ 48400

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