Answer:
$405,175.06
Explanation:
The computation of the operating cash flow for year 1 is shown below:
Sales $239,013
Less operating expenses & other cost ($239,013 × 39%) -$93,215.07
Less: Depreciation expenses
($4,020,000 + $214,086) ÷ 5 years -$846,817.20
Earning before interest and taxes -$701,019.27
Less: Taxes at 37% $259,377.13
Net income -$441,642.14
Add: depreciation expenses $846,817.20
Operating cash flow $405,175.06
We simply deduct the operating sales and depreciation expenses from sales so that the EBIT could arrive after that taxes are deducted so that the net income could come and then finally added depreciation expenses so that operating cash flow could come
