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Depreciation and accounting cash flow? Depreciation and accounting cash flow A firm in the third year of depreciating its only asset which originally cost $174,000

Depreciation and accounting cash flow?

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Depreciation and accounting cash flow A firm in the third year of depreciating its only asset which originally cost $174,000 and has a 5-year MACRS recovery period? has gathered the following data relative to the current years operations: Accruals Current assets Interest expense Sales revenue $14,000 112,000 15,100 407,000 69,800 296,000 40% Total costs before depreciation, interest and taxes Tax rate on ordinary income a. Use the relevant data to determine the operating cash flow for the current year b. Explain the impact that depreciation. as well as anv other noncash charaes. has on a firm's cash 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)

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