So Long, Inc, has sales of $334,000, costs of $145,400, depreciation expense of $63,200 and interest expense of $22,300. If the tax rate is 35%, (a) What is the operating cash flow or OCF? (b) Explain why interest paid is not a component of operating cash flow.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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So Long, Inc, has sales of $334,000, costs of $145,400, depreciation expense of
S63,200 and interest expense of $22,300. If the tax rate is 35%,
(a) What is the operating cash flow or OCF?
(b) Explain why interest paid is not a component of operating cash flow.
Transcribed Image Text:So Long, Inc, has sales of $334,000, costs of $145,400, depreciation expense of S63,200 and interest expense of $22,300. If the tax rate is 35%, (a) What is the operating cash flow or OCF? (b) Explain why interest paid is not a component of operating cash flow.
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