Question
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Crandall Oil has total sales of $1,100 and costs of $705. Depreciation is $149 and the...
Crandall Oil has total sales of $1,100 and costs of $705. Depreciation is $149 and the tax rate is 35 percent. The firm does not have any interest expense. What is the operating cash flow?
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Expert Solution
Information provided:
Sales= $1,100
Cost= $705
Depreciation= $149
Earnings after tax= Sales – Costs – Depreciation
= $1,100 - $705 - $149
= $246
Net income= Earnings after tax*(1 – tax rate)
= $246*(1 – 0.35)
= $159.90
Operating cash flow is calculated as:
= Net income + Depreciation
= $159.90 + $149
= $308.90.
In case of any query, kindly comment on the solution.
jeff jeffy answered 5 months agoRelated Solutions
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