Omaha, Inc., is expected to have the following cash revenues and expenses (other than depreciation) in 20xx: $\begin{array}{|l|l|l|l|}
\hline \text { Sales } & \$ 82,000 & \text { Depreciation expense } & \$ 5,000 \
\hline \text { Selling, general, and } & & \text { Income tax expense } & 3,000 \\hline \text { achninistrative expenses } & & \text { Cost of goods sold } & 45,000 \
\hline \text { (excluding depreciation) } & 10,000 & & \
\hline
\end{array}$ Omaha's estimated 20xx net cash flows are

Question

Quizplus · Accepted Answer

Net cash flows are calculated by taking the total cash revenues and subtracting the cash expenses. Depreciation is a non-cash expense, so it is not subtracted in the calculation of net cash flows. Therefore, the calculation is: Sales - Cost of goods sold - Selling, general, and administrative expenses - Income tax expense = $82,000 - $45,000 - $10,000 - $3,000 = $24,000.

Omaha, Inc Omaha's Estimated 20xx Net Cash Flows Are A) $21,000

Omaha, Inc Omaha's Estimated 20xx Net Cash Flows Are
A) $21,000