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8 July, 07:43

Benson, Inc., has sales of $38,530, costs of $12,750, depreciation expense of $2,550, and interest expense of $1,850. The tax rate is 21 percent. What is the operating cash flow, or OCF?

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  1. 8 July, 07:49
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    Operating Cash flow is $19,440

    Explanation:

    Operating Cash flow

    Sales = $38,530

    -Costs = $12,750

    -Depreciation = $2,550

    Operating Income = $23,230

    -Interest Expense = $1,850

    Income before Tax = $21,380

    -Tax = $4,490

    Net Income = $16,890

    Operating Cash Flow = Net Income + Non-Cash Expenses - Increase in Working Capital

    Operating Cash flow = $16,890 + $2,550 - 0

    Operating Cash flow = $19,440
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