Question: 66 Pennywise, Inc. had a great year. Sales reached an all-time high of $25 million, with a gross margin of $8.5 million. Depreciation was recorded at $850,000. Earnings before interest and taxes were $3 million, interest was $1.5 million, and total taxes were $600,000. What was the firm's operating cash flow (OCF)?

Financial Management: Theory & Practice
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ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
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Question: 66
Pennywise, Inc. had a great year. Sales reached an all-time high
of $25 million, with a gross margin of $8.5 million. Depreciation
was recorded at $850,000. Earnings before interest and taxes
were $3 million, interest was $1.5 million, and total taxes were
$600,000. What was the firm's operating cash flow (OCF)?
Transcribed Image Text:Question: 66 Pennywise, Inc. had a great year. Sales reached an all-time high of $25 million, with a gross margin of $8.5 million. Depreciation was recorded at $850,000. Earnings before interest and taxes were $3 million, interest was $1.5 million, and total taxes were $600,000. What was the firm's operating cash flow (OCF)?
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