Question

Outdoor Sports paid $12,500 in dividends and $9,310 in interest over the past year. Sales totaled $361,820 with costs of $267,940. The depreciation expense was $16,500 and the tax rate was35 percent. What was the amount of the operating cash flow?

a. $64,232
b. $65,306
c. $57,556
d. $70,056
e. $70,568

Answer 1

Answer:

c. $57,556

Explanation:

Operating Cash flow = Net Income + Non cash Expenses + net Change in working capital

Operating Cash flow = 44,245 + 16,500 + (-12,500 + 9310)

Operating Cash flow = 57,555

                                    $

Sales                       361,820

Cost                       (267,940)

Gross Income         93,880

Depreciation         (16,500)

Operating Income  77,380

Interest Expense    (9,310)

Income before Tax 68,070

Tax 35%                  (23,825)

Net Income             44,245