Depreciation and accounting cash flow Afirm in the third year of depreciating ils only asset, which originally cost $187,000 and has a 5-year MACRS recovery period has gathered the following data relative to the current year's cperations: Accruals Current assels Interest expense Sales revenue Inventory Total costs before depreciation, interest and taxes Tax rate an ordinary income $15,500 114,000 14,400 420,000 70,500 299,000 40% a. Use the relevant data to determine the operating cash flow for the current year. b. Explain the impact that depreciation, as well as any other noncash charges, has an 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 Earnings before interest and taxes Less: Taxes at 40% Net operating profit after taxes (NOPAT) Plus: Depreciation Operating Cash Flow (OCF) S $ $ 10 years 9% Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *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