A firm has S600,000 earnings before depreciation, interest, taxes. The firm has a depreciation expense of...

A firm has S600,000 earnings before depreciation, interest, taxes. The firm has a depreciation expense of $100,000, and a tax rate of 35%? What is net cash flow from operations?

Expert Solution

Working Notes:
	CALCULATION OF NET INCOME AFTER TAX
	Earning Before interest and Taxes	$ 600,000
	Less: Depreciation Expenses	$ 100,000
	Net Income Before Taxes	$ 500,000
	Less: Taxation @ 35%	$ 175,000
	Net income	$ 325,000

Solution:

	Statement of Cash Flows from Operations:
		Amount in $	Amount in $

	Net Cash flows from operation:

	Net Income	325,000

	Add: Depreciation Expenses	100,000
			425,000

	*Net cash from operaion.*		425,000

ekkarill92 answered 2 years ago

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