Question

Fill in the missing numbers in the following income statement: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g. 32.)

  

Sales   $ 644,000

Costs 345,500

Depreciation 96,200

EBIT $

Taxes (40%)

Net income$

What is the OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32.)

  

OCF $

  

What is the depreciation tax shield? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32.)

  

Depreciation tax shield $

Answer 1

Sales	644000
Costs	345500
Depreciation	96200
EBIT	202300
Tax 40%	80920
Net income	121380

Operating cash flow = Net income + depreciation

                                 = 121380 + 96200

                                  = 117580

Depreciation tax shield = depreciation Expense * tax rate

                                        = 96200* .4

                                          = 38480

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