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During 2014, Raines Umbrella Corp. had sales of $743686. Cost of goods sold, administrative and selling...

During 2014, Raines Umbrella Corp. had sales of $743686. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $434397, $71886, and $352838, respectively. In addition, the company had an interest expense of $50573 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions. This means that if the company does not have any taxable income, they do not pay any tax.) What is Raines’s operating cash flow (OCF) for 2014?

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Answer #1

Calculate operating cash flow for 2014

Sales 743686
Cost of goods sold -434397
Gross profit 309289
Administrative and selling expense -71886
Depreciation -352838
Income before interest and tax -115435
Less: Interest -50573
Income before tax -166008
Less: Income tax @30% 49802.40
Net income -116205.6
Depreciation 352838
Operating cash flow 236632.40

Operating cash flow for 2014 = $236632.40

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