Question

Consider the following information from Snuggie Corp.'s most recent Income Statement. Net Sales were $948, Operating Costs (excluding depreciation) were $222, and Depreciation and Amortization Expense was $115. The firm's Interest Expense for the year was $47, and the firm's marginal tax rate is 35%. The firm's Operating Cash Flow for the year is $_____________. Margin of error for correct responses: +/- $.05.

Answer 1

Step-by-step explanation:

EBIT = Sales - costs - depreciation

EBIT = $948 - $222 - $115

EBIT = $611

Profit before tax = EBIT - Interest

Profit before tax = $611 - $47

Profit before tax = $564

Tax = 0.35 * 564 = $197.4

OCF = EBIT - tax + depreciation

OCF = $564 - $197.4 + $115

OCF = $481.6