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Problem 9-5 Cash Flows (LO2) Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80

Problem 9-5 Cash Flows (LO2) Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80 million, and a depreciation expense of $1.80 million. Assume the tax rate is 30%. a. Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.) Method Cash Flow Adjusted accounting profits $ million Cash inflow/cash

Problem 9-5 Cash Flows (LO2)

Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80 million, and a depreciation expense of $1.80 million. Assume the tax rate is 30%.

a.

Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.)

Method Cash Flow
Adjusted accounting profits $ million
Cash inflow/cash outflow analysis million
Depreciation tax shield approach million

b. Are the above answers equal?
Yes
No

analysis million Depreciation tax shield approach million b. Are the above answers equal? Yes No

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