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

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The owner of a bicycle repair shop forecasts revenues of $168,000 a year. Variable costs will be $52,000, and rental costs for the shop are $32,000 a year. Depreciation on the repair tools will be $12,000. The tax rate is 30%. a. Calculate operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. Method Operating Cash Flow $ Adjusted accounting profits Cash inflow/cash outflow analysis Depreciation tax shield approach b. Are the above answers equal? Yes O No

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