Ann's Custom Catering has sales of $214,000, depreciation of $9,000, and net working capital of $16,000. The firm has a tax rate of 34% and a profit margin of 7%. The firm has no interest expense. What is the amount of the operating cash flow?

A) $7,980
B) $23,980
C) $30,350
D) $39,980
E) $53,700

Question

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  Operating Cash Flow (OCF) can be calculated using the formula: OCF = Net Income + Depreciation. First, calculate Net Income by applying the profit margin to sales: Net Income = Sales * Profit Margin = $214,000 * 7% = $14,980. Then, add Depreciation to Net Income to find OCF: OCF = $14,980 + $9,000 = $23,980.

Ann's Custom Catering has sales of $214,000, depreciation of $9,000, and net working capital of $16,000. The firm has a tax rate of 34% and a profit margin of 7%. The firm has no interest expense. What is the amount of the operating cash flow?

A) $7,980
B) $23,980
C) $30,350
D) $39,980
E) $53,700

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Ann's Custom Catering has sales of $214,000, depreciation of $9,000, and net working capital of $16,000. The firm has a tax rate of 34% and a profit margin of 7%. The firm has no interest expense. What is the amount of the operating cash flow?A) $7,980B) $23,980C) $30,350D) $39,980E) $53,700

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Learning Objectives

Learning Objectives

Related questions

Ann's Custom Catering has sales of $214,000, depreciation of $9,000, and net working capital of $16,000. The firm has a tax rate of 34% and a profit margin of 7%. The firm has no interest expense. What is the amount of the operating cash flow?

A) $7,980
B) $23,980
C) $30,350
D) $39,980
E) $53,700