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natima [27]
3 years ago
8

Masters, Inc., has sales of $37,900, costs of $15,000, depreciation expense of $2,400, and interest expense of $1,310. If the ta

x rate is 25 percent, what is the operating cash flow, or OCF?
Business
1 answer:
I am Lyosha [343]3 years ago
6 0

Answer:

Operating cash flow= $16,792.5

Explanation:

Giving the following information:

Masters, Inc., has sales of $37,900, costs of $15,000, depreciation expense of $2,400, and interest expense of $1,310.

<u>To calculate the operating cash flow, we need to use the following structure:</u>

Sales= 37,900

COGS= (15,000)

Gross profit= 22,900

Depreciation= (2,400)

Interest= (1,310)

EBT= 19,190

Tax= (19,190*0.25)= (4,797.5)

Depreciation= 2,400

Operating cash flow= 16,792.5

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Answer:

See explaination for the details of the answer.

Explanation:

1) Increase

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Higher real interest rate simply means borrowing cost is higher for the firms and so that they will reduce the investment in respose to that.

3) Decrease

A lower tax means higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and to the government with tax on profit. However, if the rate of tax itself has been increased then in that case corporates will see higher tax as a dampener in sentiments and they might curtail investment plans.

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A recession means there will be lesser economic activity overall and demand will be lower so as the consumption. In such case, planned investment will be reduced.

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Ballard Company incurred a total cost of $8,500 to produce 400 units of pulp. Each unit of pulp required six (6) direct labor ho
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Answer:

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Explanation:

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$8,500 - $3,600 = Total fixed cost

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