Le Place has sales of $439,000, depreciation of $32,000, and net working capital of $56,000. The firm has a tax rate of 34 percent and a net profit margin of 6 percent. The firm has no interest expense. What is the amount of the operating cash flow?Group of answer choices$54,980$114,340$52,616$58,340$49,384
Question
Le Place has sales of 32,000, and net working capital of 54,98052,61649,384
Solution
To calculate the operating cash flow (OCF), we first need to find the net income. We can do this by multiplying the sales by the net profit margin:
26,340
Next, we add back the depreciation because it's a non-cash expense:
32,000 = $58,340
So, the operating cash flow is 58,340.
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