Return to The owner of a bicycle repair shop forecasts revenues of $172,000 a year. Variable costs will be $53,000, and rental costs for the shop are $33,000 a year. Depreciation on the repair tools will be $13,000. b. Calculate the operating cash flow for the repair shop using the three methods given below. Now calculate the operating cash flow. i. Dollars in minus dollars out. ii. Adjusted accounting profits. ili. Add back depreciation tax shield. Operating Cash Flow Methods of Calculation i Dollars in Minus Dollars Out Adjusted Accounting profits . After tax Operating Cash flow The owner of a bicycle repair shop forecasts revenues of $172,000 a year, Variable costs will be $53,000, and rental costs for the shop are $33,000 a year. Depreciation on the repair tools will be $13,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. Answer is complete and correct. INCOME STATEMENT Revenue $ Variable costs Rental costs Depreciation Pretax profit Taxes Net income S 172,000 (53,000) (33,000) (13000) 73,000 14,600 58.400