Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)

Sales $ 687,900

Costs 442,800

Depreciation 115,400

EBIT $

Taxes (30%)

Net income $

Calculate the OCF.

What is the depreciation tax shield?

OCF = $206,190

Depreciation tax shield = $34,620

Explanation:

The computation of the depreciation tax shield is shown below:

= Depreciation * tax rate

= $115,400 * 30%

= $34,620

And the operating cash flow is

= EBIT + Depreciation - Income tax expense

where,

EBIT = Sales - cost of good sold - depreciation expense

= $687,900 - $442,800 - $115,400

= $129,700

And, the income tax expense is

= (Sales - cost of good sold - depreciation expense) * tax rate

= ($687,900 - $442,800 - $115,400) * 30%

= $129,700 * 30%

= $38,910

So, the OCF is

= $129,700 + $115,400 - $38,910

= $206,190