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Calculate operating cash flow

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Reference no: EM13340976

A proposed new project has projected sales of $125,000, costs of $59,000 and depreciation of $12,800. The tax rate is 35%. Calculate operating cash flow using the four different approaches described in the chapter and verify that the answer is the same in each case.
4 different approaches:



 Amount
Sales $125,000
Costs ($59,000)
Depreciation ($12,800)
EBIT (Earnings before interest and tax) $53,200
Taxes @ 35% of EBIT ($18,620)
Net Income $34,580

Reference no: EM13340976

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