Compute the net cash flow in 2015

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Reference no: EM131881575

The POP Corporation had sales of $80 million in 2015. Costs other than depreciation and amortization were 60 percent of sales, and depreciation and amortization expenses were $19.6 million.

It had $140 million debt with 3.5 % annual interest. All sales revenues were collected in cash, and costs other than depreciation and amortization must be paid for during the year. The corporate tax rate is 35 percent.

a. Set up an income statement for the above information.

b. Compute the net cash flow in 2015, and explain the meaning of the final number you found from the computation.

Reference no: EM131881575

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