The EBIT is $20,000, depreciation is $5,000, and taxes are $3,000. What is the operating cash flow (OCF)?
A) $25,000
B) $22,000
C) $14,000
D) $25,000.

Question

Quizplus · Accepted Answer

Operating Cash Flow (OCF) can be calculated using the following formula:

OCF = EBIT + Depreciation - Taxes

Substituting the given values:

OCF = $20,000 + $5,000 - $3,000 = $22,000

Therefore, the correct choice is (B) $22,000.

The EBIT Is $20,000, Depreciation Is $5,000, and Taxes Are