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In: Finance

Disturbed, Inc., had the following operating results for thepast year: sales = $22,586; depreciation =...

Disturbed, Inc., had the following operating results for the past year: sales = $22,586; depreciation = $1,300; interest expense = $1,048; costs = $16,485. The tax rate for the year was 35 percent. What was the company's operating cash flow?

Multiple Choice

  • $7,415

  • $2,980

  • $4,787

  • $3,753

  • $2,439


Solutions

Expert Solution

Operating cash flow = Net income + Depreciation + Interest expense

Net income = (Sales - costs - depreciation - interest expense) * (1 - tax rate)

Net income = (22,586 - 16,485 - 1,300 - 1,048) * (1 - 0.35)

Net income = 2,439.45

Operating cash flow = 2,439.45 + 1,300 + 1,048

Operating cash flow = $4,787.45

Option C is correct: $4,787

jeff jeffy answered 2 years ago
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