The owner of a bicycle repair shop forecasts revenues of $168,000 a year. Variable costs will be $52,000, and the rental costs for the shop are $32,000 a year. Depreciation on the repair tools will be $12,000.

a. Prepare an income statement for the shop based on these estimates. the tax rate is 20%

b. Calculate the operating cash flow for the repair shop using three methods given below: now calculate the operating cash flow.

INCOME STATEMENT Depreciation Pretax profit Rental costs Revenue INCOME STATEMENT - i. Dollars in minus dollars out. ii. Adjusted accounting profits. iii. Add back depreciation tax shield. Methods of Calculation Operating Cash Flow i. Dollars in Minus Dollars Out ii. Adjusted Accounting profits iii. After tax Operating Cash flow