calculate the operating cash flow in Year 1. All numbers are incremental. Sales $42,500 Depreciation $10,000 Other Operating Costs $17,000 Interest Expense $4,000 Tax rate 21%

$20,075

Explanation:

Operating income of year 1 = Sales revenue in year 1 - Depreciation - Other operating costs

= 42,500 - 10,000 - 17,000

=15,500

The tax rate is 35%. Tax amount in year 1 = Tax rate * Operating income in year 1

=0.35 * 15,500

=$5,425

Year 1 Cash flow = Sales revenue in year 1 - Other operating costs - Tax amount

=42,500 - 17,000 - 5,425

=$20,075

Therefore, $20,075 is the Year 1 Cash flow

answer is a

explanation:

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