The forecast for your division for next year is sales revenue of $250,000, but interest expense will be $9,000. Operating expenses will be $195,000 in variable costs and $35,000 in fixed costs. Depreciation expenses will be $18,000. If the applicable tax rate is 39%, what is the forecast OCF for next year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 20P
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The forecast for your division for next year is sales revenue of $250,000, but
interest expense will be $9,000. Operating expenses will be $195,000 in
variable costs and $35,000 in fixed costs. Depreciation expenses will be
$18,000.
If the applicable tax rate is 39%, what is the forecast OCF for next year?
Transcribed Image Text:The forecast for your division for next year is sales revenue of $250,000, but interest expense will be $9,000. Operating expenses will be $195,000 in variable costs and $35,000 in fixed costs. Depreciation expenses will be $18,000. If the applicable tax rate is 39%, what is the forecast OCF for next year?
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