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NOPAT=EBIT(1T) To convert NOPAT to operating cash flow (OCF), we merely add back depreciation. OCF=NOPAT+Depreciation Depreciation and accounting cash flow A firm has gathered the
NOPAT=EBIT(1T) To convert NOPAT to operating cash flow (OCF), we merely add back depreciation. OCF=NOPAT+Depreciation Depreciation and accounting cash flow A firm has gathered the following data for its current year's operations. The firm has only one asset, which has a three-year recovery period. The cost of the asset a year ago was $165,000. The depreciation rate is 45%. a. Calculate the firm's operating cash flow for the current year (see Equation 4.2). b. Why is it important to add back noncash items such as depreciation when calculating cash flows
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