Question

Hot and Cold has annual sales of $982,000, annual depreciation of $127,000, and net working capital of $243,000. The tax rate is 34 percent and the profit margin is 6 percent. The firm has no interest expense. What is the amount of the operating cash flow

Answer 1

Answer:

$185,920

Explanation:

Calculation for What is the amount of the operating cash flow

Using this formula

Operating cash flow=(Sales *Profit margin)+Depreciation

Let plug in the formula

Operating cash flow=($982,000*6%)+$127,000

Operating cash flow=$58,920+$127,000

Operating cash flow=$185,920

Therefore the amount of the operating cash flow will be $185,920