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The owner of a bicycle repair shop forecasts revenues of $220,000 a year. Variable costs will be for the shop are $45,000 a year. Depreciation
The owner of a bicycle repair shop forecasts revenues of $220,000 a year. Variable costs will be for the shop are $45,000 a year. Depreciation on the repair tools will be $25,000. 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 the three methods given below: i. Dollars in minus dollars out. ii. Adjusted accounting profits. iii. Add back depreciation tax shield
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