A sisue 92280 543300 SolutionOperating cash Flow Net Income

Solution

Operating cash Flow = Net Income After Tax + Depreciation Expenses

Net Income after tax = [Revenues – COGS – SGA – Depreciation Expenses] x [1-Tax Rate]

= [$45,000 – 4,500 – 7,500 – 7,500] x [1 - 0.40]

= $25,500 x 0.60

= $15,300

Therefore, Operating cash Flow = Net Income After Tax + Depreciation Expenses

= $15,300 + 7,500

= $22,800

Hence, The Answer is “B. $22,800”