Net Income and OCF During 2012, Raines Umbrella Corp. had sales of $630,000. Cost of goods sold,

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Net Income and OCF During 2012, Raines Umbrella Corp. had sales of $630,000.

Cost of goods sold, administrative and selling expenses, and depreciation expenses were $470,000, $95,000, and $140,000, respectively. In addition, the company had an interest expense of $70,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

a. What is Raines’s net income for 2012?

b. What is its operating cash flow?

c. Explain your results in

(a) and (b).

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Corporate Finance With Connect Access Card

ISBN: 978-1259672484

10th Edition

Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe

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