Depreciation and accounting cash flow A firm in the third year of depreciating its only asset, which originally cost $170,000 and has a 5-year MACRS recovery period has gathered the following data relative to the current year's operations Accruals Current assets Interest expense Sales revenue Inventory Total costs before depreciation, interest and taxes Tax rate on ordinary income $15.200 120,000 15,000 419,000 70,100 297,000 40% a. Use the relevant data to determine the operating cash flow for the current year b. Explain the impact that depreciation, as wel as any other noncash charges, has on a firm's cash flows a. Complete the following table to determine the operating cash flow (OCF) (Round to the nearest dollar) Operating Cash Flow Sales revenue Less Total costs before depreciation, interest, and taxes Depreciation expense Eamings before interest and taxes Less Taxes at 40% Net operating profit after taxes (NOPAT) Plus: Depreciation Operating Cash Flow (OCF) $ $ Question 5, P4-4 (similar to) HW Score: 30.91%, 6.18 of 2 ework Depreciatic relative to th Accrual Current Interest Sales re More info (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Invento Percentage by recovery year Total co Tax rate Recovery year 1 3 years 5 years 7 years 10 years 33% 20% 14% 10% 2 45% 32% 25% 18% a. Use the r 3 15% 19% 18% 14% b. Explain t 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% a. Complete 7 9% 7% 8 4% 6% Operat 9 6% 10 6% Sales r 11 4% Less: T Totals 100% 100% 100% 100% Deprec Earning Less: T "These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. Net op Plus: D Operat ample Get more help Print Done recov