Hailey, Inc., has sales of $19,650, costs of $9,380, depreciation expense of $2,050, and interest expense of $1,540. Assume the tax rate is 35 percent. What is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number,

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Business

Tristin Christian

18 October, 08:26

Hailey, Inc., has sales of $19,650, costs of $9,380, depreciation expense of $2,050, and interest expense of $1,540. Assume the tax rate is 35 percent. What is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number,

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Graham Jacobs · Answer 1

Net operating cash-flow = $6,392

Explanation:

Giving the following information:

Sales of $19,650.

Costs of $9,380

Depreciation expense of $2,050.

Interest expense of $1,540.

The tax rate is 35 percent

Cash - flow:

Sales 19650

Cost = 9380 (-)

Interest = 1540 (-)

Depreciation = 2050 (-)

EBT = 6680

Tax = (6680*0.35) = 2338 (-)

EAT = 4342

Depreciation = 2050 (+)

Net operating cash-flow = 6392