During the year,The Dalton Firm had sales of $3,210,000.Cost of goods sold,administrative and selling expenses,and depreciation expenses were $2,540,000,$389,000,and $112,000,respectively.In addition,the company had an interest expense of $118,000 and a tax rate of 34 percent.(Ignore any tax loss carryback or carryforward provisions.)What is its operating cash flow?

Question

Quizplus · Accepted Answer

EBIT = [($3,210,000 - $2,540,000 - $389,000 - $112,000 = $169,000; Tax = ($169,000 - $118,000) × 0.34 = $17,340; OCF = $169,000 + $112,000 - $17,340 = $263,660

During the Year,The Dalton Firm Had Sales of $3,210,000