please read questions because its third time no one can help
A.> Operating Cash Flow:-
Calculation of Depreciation as per the MACRS recovery method:-
since the property is in its third year, therefore the rate would be 11.52% as per the table for 5 years
therefore, depreciation is 11.52*$180000/100
=$20736
Calculation of Operating Cash Flow:-
Particulars | Amount $ |
Sales Revenue | 400,000 |
Less:-Total cost before depreciation, interest, and taxes | (290000) |
- Depreciation Expenses | (20736) |
Earnings before interest and tax | 89264 |
Less:- Interest | (15000) |
Earnings before tax | 74264 |
Less:- Tax @21% | (15595.44) |
Net Operating Profit after taxes | 58668.56 |
Add:- Depreciation | 20736 |
Operating Cash Flow = $138073.12
or answer can be like this
Particulars | Amount $ |
Sales Revenue | 400,000 |
Less:-Total cost before depreciation, interest, and taxes | (290000) |
- Depreciation Expenses | (34560) |
Earnings before interest and tax | 75440 |
Less:- Interest | (15000) |
Earnings before tax | 60440 |
Less:- Tax @21% | (12692.4) |
Net Operating Profit after taxes | 47747.6 |
Add:- Depreciation | 34560 |
Operating cash flow = 82307.6
please read questions because its third time no one can help Depreciation and accounting cash flow...
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