Depreciation and accounting cash flowA firm in the third year of depreciating its 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 operations:

Accruals

$ 15,600

Current assets	119,000
Interest expense	15,900
Sales revenue	414,000
Inventory	70,500
Total costs before depreciation, interest and taxes	285,000
Tax rate on ordinary income	21 %

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 on a firm's cash flows.

Operating Cash Flow
Sales revenue	$
Less: Total costs before depreciation, interest, and taxes
Depreciation expense
Earnings before interest and taxes	$
Less: Taxes at 21%
Net operating profit after taxes (NOPAT)	$
Plus: Depreciation
Operating Cash Flow (OCF)	$