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telo118 [61]
3 years ago
11

The Barrett Company had sales of $19,800, total costs of $10,900, depreciation expense of $2,100, interest expense of $1,250. Th

eir tax rate is 40%. The firm's operating cash flow is:______.
a. $7,650.
b. $8,900.
c. $6,680.
d. $3,330.
e. $5,430.
Business
1 answer:
elixir [45]3 years ago
8 0

Answer:

d $3,330

Explanation:

The firm's operating cash flow is computed as;

Sales - Costs - Depreciation expense = EBIT

EBIT = $19,800 - $10,900 - $2,100

= $6,800

EBT = EBIT - Interest expense

EBT = $6,800 - $1,250

EBT = $5,550

Firm's tax rate = 40% × $5,550= $2,220

Operating cash flow = $5,550 - $2,220

Operating cash flow = $3,330

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In 2016, Joshua gave $12,500 worth of XYZ stock to his son. In 2017, the XYZ shares are worth $25,000. What is the total amount
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