ment Input all not round intermediate calculations Sales Cos

ment. (Input all not round intermediate calculations.) Sales Cosi Depreciation $ 681,900 436,800 109,400 EBIT Taxes (30%) Net income Calculate the OCF OCF What is the depreciation tax shield? Depreciation tax shield

Solution

Particulars Amount(in$) Sales 681900 Less: Costs 436800 Less: Depreciation 109400 EBIT 135700 Less: Tax (135700*0.30) 40710 Net Income 94990 OCF= Net income+ depreciation        = 94990+109400=$204390 OCF= $204390 Depreciation tax shield= Depreciation* tax rate                                 = 109400*0.30= $32820 Depreciation tax shield= $32820