Answer:
The company's operating cash flow is $100,000
Explanation:
The computation of the operating cash flow is shown below:
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense - administrative and selling expenses
= $740,000 - $550,000 - $95,000 - $90,000
= $5,000
The income tax expense equals to
= (Sales - cost of good sold - depreciation expense - administrative and selling expenses - interest rate) × tax rate
= ( $740,000 - $550,000 - $95,000 - $90,000 - $94,000) × 35%
The amount comes in negative so we cannot compute the tax expense as corporation is suffering from the net loss
And all other items would remain same
Now put these values to the above formula
So, the value would equal to
= $5,000 + $95,000 - $0
= $100,000
