Sheaves, Inc., has sales of $50,000, costs of $23,000, depreciation expense of $2,250, and interest expense of $2,000. Required:
If the tax rate is 23 percent, what is the operating cash flow, or OCF?

$21,767.50

Explanation:

Computation table:

Particular                      Amount

Sales                             $50,000

Less: Costs                   $23,000

Less: Depreciation       $2,250

EBIT                              $24,750

Less: Interest               $2,000.

EBT                              $22,750

Less: Tax (23%)           $5,232.50

Net Income              $17,517.50

$24,750 + 2,250 -5,232.50

$21,767.50

answer; intensive use of a sales force and is relatively costly;