Le Place has sales of $439,000,depreciation of $32,000,and net working capital of $56,000. The firm has a tax rate of 34% and a profit margin of 6%. The firm has no interest expense. What is the amount of the operating cash flow?
A) $49,384
B) $52,616
C) $54,980
D) $58,340
E) $114,340

Question

Quizplus · Accepted Answer

Operating cash flow (OCF) is calculated as: OCF = (Sales × Profit Margin) + Depreciation. Here, OCF = ($439,000 × 0.06) + $32,000 = $26,340 + $32,000 = $58,340.

Le Place Has Sales of $439,000,depreciation of $32,000,and Net Working