Question 3

The Firm, Inc. has an after- tax cost of capital of 12%, and its tax rate is 40%. Last year the firm had $3,400,000 of earnings before interest and taxes on its $12,000,000 of sales, while depreciation expense was $800,000, and interest expense $200,000. The firm had capital employed of $5,000,000. What is the firms operating cash flow.