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The Pretzel Factory has net sales of $821,300 and costs of $698,500. The depreciation expense is $28,400 and the interest paid is 8,400. What is the amount of the firm's operating cash flow if the tax rate is 34 percent?A) $87,620B) $89,540C) $91,220D) $93,560E) $95,240

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Karabo99

Answer:

D) $93,560

Explanation:

Sales                                         821300

Costs                                         (698500)

depreciation                                   (28400)

EBIT                                           94400

interest                                           (8400)

EBT                                                    86000

taxes@34%                                   (29240)

Net income                                   $56760.

Oprating Cash Flow = EBIT- taxes + Depreciation

                                  = 94400 - 29240 + 28400

                                  = $93560.

Therefore, The amount of the firm's operating cash flow if the tax rate is 34 percent is $93560

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