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The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for the shop are
The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for the shop are $37.000 a year. Depreciation on the repair tools will be $17,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. INCOME STATEMENT 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. m. Add back depreciation tax shield
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