You are analyzing a project and have developed the following estimates. the depreciation is $9,500 a year and the tax rate is 34
1 answer:
The operating cash flow is (D) $10,952.
<h3>What is Operating cash flow?</h3>- The difference between cash inflows and cash outflows from the company's business operations is referred to as operating cash flow.
- Operating cash flow excludes noncash expenses such as depreciation and can be positive or negative depending on the circumstances.
- It is calculated by adding net income and depreciation.
To find the operating cash flow:
- Net operating income: Given (Refer to the chart given below)
Formula:
- Operating cash flow = Net income + Depreciation expense
- Operating cash flow = $1,452 + $9,500
- Operating cash flow = $10,952
Therefore, the operating cash flow is (D) $10,952.
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The correct question is given below:
You are analyzing a project and have developed the following estimates. The depreciation is $9,500 a year, and the tax rate is 34%. What is the operating cash flow? Show work and explain.
Unit Sales $1,800
Price per unit $31
Variable cost per unit $22
Fixed Cost $4,500
A. 5,408
B. 7,952
C. 8,407
D. 10,952
E. 12,408
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