Question

A​ firm's operating cash flow​ (OCF) is defined as​ ________. A. gross profit minus operating expenses B. EBIT times one minus the tax rate plus depreciation C. EBIT plus depreciation D. gross profit minus depreciation

Answer 1

Answer:

B. EBIT times one minus the tax rate plus depreciation

Explanation:

The formula to calculate the operating cash flow is given below:

Operating cash flow = EBIT + Depreciation expenses - Income tax expense

The EBIT stands for earning before interest and taxes

And, EBIT - income tax expense = Earning after taxes (EAT)

The operating cash flow is the amount which is left after paying all the expenses related to cash