A project has annual depreciation of $17,900, costs of $90,500, and sales of $131,500. the applicable tax rate is 40 percent. wh

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2 years ago

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at is the operating cash flow?

1 answer:

marin [14] · Answer 1 · 2023-04-03T02:56:05+03:00

The operating cash flow is $31,760.

<h3>What is operating cash flow?</h3>

In financial accounting, operating cash flow (OCF), cash flow provided by operations (CFO), cash flow from operating activities (CFO), or free cash flow from operations (FCFO) refers to the amount of cash generated by a company from its revenues, excluding costs associated with long-term capital investment or securities investment.
Operating activities comprise any spending or cash sources involved in a company's day-to-day business operations.
Operating cash flow is defined by the International Financial Reporting Standards as cash generated from activities less taxation and interest paid.

To calculate the operating cash flow:

Operating Cash Flow = Operating Income + Depreciation – Taxes + Change in Working Capital
(131,500-90,500)(1-0.40)+(17,900×0.40)
= $31,760

Therefore, the operating cash flow is $31,760.

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