Problem #1

During 2010, Raines Umbrella Corp. had sales of $700,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $500,000, $110,000, and $75,000, respectively. In addition, the company had an interest expense of $86,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

a.	What is Rainess net income for 2010? (Input the amount as a positive value.)

(Click to select)Net incomeNet loss

$

b.	What is its operating cash flow?

Operating cash flow

$

Problem #2

Chevelle, Inc., has sales of $43,500, costs of $19,900, depreciation expense of $1,600, and interest expense of $1,100.

If the tax rate is 35 percent, what is the operating cash flow, or OCF?