The R.J. Ramboldt Co. paid dividends of $1,400, interest of $800, and taxes of $2,100 for the year. The tax rate is 35 % and the depreciation expense is $500. What is the operating cash flow for the year?

Question

Quizplus · Accepted Answer

Operating cash flow is calculated as: Net Income + Depreciation + Interest. Net Income is calculated as (Taxes / Tax Rate) - Taxes. So, Net Income = ($2,100 / 0.35) - $2,100 = $4,900. Therefore, Operating Cash Flow = $4,900 + $500 + $800 = $5,200.

The RJ Ramboldt Co