Assume a corporation has earnings before depreciation and taxes of $109,000, depreciation of...

Question:

Assume a corporation has earnings before depreciation and taxes of $109,000, depreciation of $47,000 and that it is in a 40 percent tax bracket. Compute its cash flow using the following format.

Earnings before depreciation and taxes =

Depreciation =

Earnings before taxes =

Taxes =

Earnings after taxes =

Depreciation =

Cashflow =

Operating cash flow

Operating cash flow refers to the generated cash of the firm from its business operation. It is a significant indicator for the financial health of the company of whether they produce sufficient cash flow to meet its short term obligation

Answer and Explanation:

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The table below shows the new cash flow of the firm.

Earnings before   depreciation and taxes 109,000
Depreciat...

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Operating Cash Flow: Definition & Examples

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Chapter 10 / Lesson 4
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