RTF Oil has total sales of $911,400 and costs of $787,300. Depreciation is $52,600 and the tax rate is 21 percent. The firm is all-equity financed. What is the operating cash flow?

Question

Quizplus · Accepted Answer

Operating cash flow (OCF) is calculated as: OCF = (Sales - Costs) * (1 - Tax Rate) + Depreciation. Here, OCF = ($911,400 - $787,300) * (1 - 0.21) + $52,600 = $109,085.

RTF Oil Has Total Sales of $911,400 and Costs of $787,300