What is the amount of the operating cash flow for a firm with $500,000 profit before tax, $100,000 depreciation expense, and a 35 percent marginal tax rate?
A)$260,000
B)$325,000
C)$360,000
D)$425,000

Question

Quizplus · Accepted Answer

Operating cash flow is calculated as: Profit before tax - Taxes + Depreciation. Taxes are calculated as 35% of $500,000, which is $175,000. So, operating cash flow = $500,000 - $175,000 + $100,000 = $425,000.

What Is the Amount of the Operating Cash Flow for a Firm